Sustained-release (SR) theophylline (TPH) tablets were prepared by applying the moisture-activated dry granulation method. The interaction between the excipients sodium alginate (SAL) and calcium gluconate (CG) was the base for the formation of a cross-linked matrix that may regulate TPH release from the formulated tablets. The prepared granules showed good physical characteristics concerning the flow properties and compressibility, with the angles of repose in the range 29-31, and the compressibility indices ranged between 15% and 25%. The granules had low friability values (3.0%-4.2%), depending on SAL:CG ratios. The corresponding tablets showed good physical properties, with a lower rate of drug release compared with the commercial TPH tablets (Quibron). The release of TPH from the prepared tablets was not markedly affected by either the concentration of added dry binder (carbopol 934) or the tablet hardness, indicating that the rate-determining step in drug release was the diffusion through the produced calcium alginate matrix. Tablets formulated with equal ratios of CG and SAL that showed good physical properties and slow TPH release were chosen for bioavailability studies in beagle dogs, and results were compared with those for Quibron. The in vivo data showed a comparable plasma concentration profile for both tablet formulations, with prolonged appearance of drug in the plasma in detectable amounts for up to 24 h. The formulated tablets showed 104.65% bioavailability relative to that of the commercial tablets. The rate and extent of absorption of TPH showed no significant differences from that of the commercial tablets. Moreover, no significant differences were found in the pharmacokinetic parameters related to the rate and extent of TPH absorption from the prepared and commercial tablets.