Chitosan (CS) and hydroxypropylmethyl cellulose (HPMC) blend microspheres were prepared by water-in-oil emulsion technique and were loaded with an anti-cancer drug 5-fluorouracil (5-FU). CS-HPMC microspheres were characterized by Fourier transform infrared spectroscopy to confirm the cross-linking reaction. Scanning electron microscopy (SEM) was also used to assess the surface morphology of particles prepared. The quantity of release of 5-FU from the microspheres have been studied in terms of blend composition and amount of cross-linking agent. Differential scanning calorimetry and X-ray diffraction techniques indicated a uniform distribution of 5-FU particles in microspheres, whereas SEM suggested the spherical structure of the microspheres with slight rough surface. The in vitro drug release indicated that the particle size and release kinetics depend upon blend composition, amount of cross-linking agent used and amount of 5-FU present in the microspheres.