We prepared cellulose acetate butyrate (CAB)-coated cholestyramine microcapsules as a intragastric floating drug delivery system endowed with floating ability due to the carbon dioxide generation when exposed to the gastric fluid. The microcapsules also have a mucoadhesive property. Ion-exchange resin particles can be loaded with bicarbonate followed by acetohydroxamic acid (AHA) and coated with CAB by emulsion solvent evaporation method. The drug concentration was monitored to maintain the floating property and minimum effective concentration. The effect of CAB: drug-resin ratio (2:1, 4:1, 6:1 w/w) on the particle size, floating time, and drug release was determined. Cholestyramine microcapsules were characterized for shape, surface characteristics, and size distribution; cholestyramine/acetohydroxamic acid interactions inside microcapsules were investigated by X-ray diffractometry. The buoyancy time of CAB-coated formulations was better than that of uncoated resin particles. Also, a longer floating time was observed with a higher polymer:drug resin complex ratio (6:1). With increasing coating thickness the particle size was increased but drug release rate was decreased. The drug release rate was higher in simulated gastric fluid (SGF) than in simulated intestinal fluid (SIF). The in vivo mucoadhesion studies were performed with rhodamine-isothiocyanate (RITC) by fluorescent probe method. The amount of CAB-coated cholestyramine microcapsules that remained in the stomach was slightly lower than that of uncoated resin particles. Cholestyramine microcapsules were distributed throughout the stomach and exhibited prolonged gastric residence via mucoadhesion. These results suggest that CAB-coated microcapsules could be a floating as well as a mucoadhesive drug delivery system. Thus, it has promise in the treatment of Helicobacter pylori.