Objective: The aim of the present study was to formulate and optimize famotidine loaded micro balloons for enhancing bioavailability, increasing gastric residence time of drug and to achieve sustained release in the stomach.Methods: Microballoons were prepared using emulsion solvent diffusion method using HPMC K4M as the polymer. All the formulated microspheres were subjected to various evaluation parameters such as % drug entrapment, micromeritics properties, % buoyancy and in vitro drug release studies. The formulation was optimized using 32 full factorial design. Optimized formulation was subjective to in vivo floating (X-ray) and in vivo antiulcer studies.Results: The microballoons were smooth and spherical in shape and were porous in nature due to hollow cavity. Sustained/controlled release of drug was observed for more than 12 h. based on the results of % drug entrapment, in vitro drug release and % buoyancy studies, formulation F6 was selected as optimized formulation. The release kinetics of optimized formulation followed Higuchi model and mechanism of release was non-Fickian diffusion. Examination of the X-ray radiographic images taken during the study indicated that the optimized formulation remained buoyant and uniformly distributed in the gastric contents for a long period. In ethanol-induced ulcer model, drug-loaded microballoons treated group showed significant ulcer protection index of 83.26% as compared to the marketed brand of famotidine 76. 09% and untreated control group.Conclusion: Famotidine-loaded floating micro balloons were successfully prepared and prove to be useful for the prolonged gastric residence of the drug, better bioavailability, patient compliance and anti-ulcer activity.