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The purpose of this research was to study processing variables at the laboratory and pilot scales that can affect hydration rates of xanthan gum matrices containing diclofenac sodium and the rate of drug release. Tablets from the laboratory scale and pilot scale proceedings were made by wet granulation. Swelling indices of xanthan gum formulations prepared with different amounts of water were measured in water under a magnifying lens. Granules were thermally treated in an oven at 60°C, 70°C, and 80°C to studythe effects of elevated temperatures on drug release from xanthan gum matrices. Granules from the pilot scale formulations were bulkier compared to their laboratory scale counterparts, resulting in more porous, softer tablets. Drug release was linear from xanthan gum matrices prepared at the laboratory scale and pilot scales, however, release was faster from the pilot scales. Thermal treatment of the granules did not affect the swelling index and rate of drug release from tablets in both the pilot and laboratory scale proceedings. On the other hand, the release from both proceedings was affected by the amount of water used for granulation and the speed of the impeller during granulation. The data suggest that processing variables that affect the degree of wetness during granulation, such as increase in impeller speed and increase in amount of water used for granulation, also may affect the swelling index of xanthan gum matrices and therefore the rate of drug release.