Abstract The purpose of the study was to develop a capsulated delivery system of surface solid dispersion (SSD) of loperamide (LOP) for intestinal delivery that has potential for enhanced drug release. For the preparation of SSDs, crospovidone, croscarmellose sodium and avicel PH 101 were screened for swelling capacity and in vitro drug adsorption. SSDs were prepared by solvent evaporation method and the SSD prepared with crospovidone (drug to carrier ratio of 1:3) showed highest in vitro dissolution of 82.50% in 60 min. The optimized SSD3 was evaluated for micromeritic properties and characterized by XRD, DSC, SEM and FTIR. SSD3 was filled in Eudragit S 100 coated capsules SSD3 showed promising site specific drug delivery with release of 76.25% in 6 h. The developed dosage form has potential to protect loperamide from being released in the upper part of the GI system and thereby target to intestine.