The aim of this study was to develop and evaluate Zidovudine (AZT) loaded microparticulated bioadhesive vaginal gel (AZMBVG) in order to obtain a controlled-releasing, in order to obtain a controlled-release system for treatment of AIDS. AZT microparticle AZMCs was prepared by O/O single emulsion solvent evaporation method (II) and evaluated for encapsulation efficiency, drug loading, surface morphology and invitro drug release profiles and drug release mechanism and optimized. To achieve second objective, optimized AZMC4 were encompassed in bioadhesive gel to form AZMBVGs by cold mechanical method and compared with the bioadhesive vaginal gel (BVG1) without microcapsule. The optimized microcapsules were incorporated in bioadhesive gel prepared using different bioadhesive polymer evaluated the gel for the encapsulation efficiency, drug loading,invitro release profiles and drug release kinetics, spreadability, extrudibility, bioadhesion , vaginal irritancy and pharmacokinetics study by invivo methods by using New Zealand white female rabbit model. A comprehensive protocol, for the AZMBVG was developed successfully. Further research in this area will be significant outcome for AIDS