Furosemide is loop diuretics belonging to BCS class IV category, which is comparatively more difficult to formulate as effective oral drug delivery system owing to its restrictive solubility and permeability characteristics. In present work, solubility enhancement and improvement in permeability of furosemide was done by solid dispersion technique. Moreover, an attempt to overcome limited permeability issue was made by a logical technique of keeping the dosage form in the proximity of absorbing surface of GI tract in order to enhance its probability of being absorbed. Final modified release delivery system was in the form of capsule filled with 4 mucoadhesive minitabs having around 4 mm diameter and <3mm thickness. Solid dispersions was prepared using two different carriers - PVP K 30 and PEG 6000 at different drug:carrier ratios. Best solid dispersion was further utilized for preparing mucoadhesive minitabs. Moreover, considering pH dependent solubility of Furosamide, a basic pH microenvironment was created inside tablet matrix to further felicitate drug solubility and release during initial few hours. Optimization of the formulation was done by using Central Composite Design with independent variables -PEO WSR 303 and HPMC K100 M; and dependent variables - % drug released at four different time points up to 24 h. The release profile as a response was carried out for 24 hrs at different time. Overlay spectra was plotted and in design space the value of %PE was found to be less than 5% revealed the best fit model. Further more solid dispersion of PVP K 30, PEG 6000 were prepared and checked for solubility enhancement and finally, the developed solid dispersion incorporated in to mucoadhesive tablet. The outcome of experimental design revealed that both the formulation variables PEO 303 and HPMC K100 M have significant impact on the dependent response like dissolution at 2 hrs, 6 hrs, 12 hrs, 18 hrs, and 24 hrs. ANOVA revealed that the derived models were significant at each response of dissolution. Solid dispersion prepared by Drug: PVP K-30 ratio of 1:5 showed increment in the solubility of Furosemide. Optimization formulation derived from the experimental design showed an extended release profile up to 24 hrs with sufficient adhesive strength to retain the dosage form in stomach as compared to the plain drug. However, the logic applied for keeping a dosage form in the proximity of GI tract surface can only be proved by in vivo studies. Further pharmacokinetic studies on such formulations are required in to support in vitro findings. Moreover, in vivo studies in the presence of permeation enhancer need to be conducted to overcome the low permeability issue of such drugs.