The aim of the present study was to develop and characterize coated chitosan-alginate beads containing cefaclor as a controlled release delivery system. Coated cefaclor beads were prepared by solvent evaporation techniques. Beads were found to be intact and spherical in shape. Their size range was 1.05 to 2.06. The loading efficiency showed maximum value when the concentration of cefaclor, chitosan and PEG 400 was 10 % (m/V), 0.5 % (m/V) and 2 % (V/V), respectively. Best retardation of cefaclor release from chitosan-alginate beads was achieved by coating with 15 % of shellac in formula F19. A significant antimicrobial activity (p < 0.05) against Staphylococcus aureus and Klebsiella pneumoniae was observed for formula F19 compared to the standard antibiotic disc. Furthermore, the simulated plasma profile showed the superiority of F19 in sustaining drug release for more than 12 h. Therefore, shellac coated chitosan-alginate beads could be considered a successful controlled release oral cefaclor dosage form.