The purpose of this study was to formulate a sustained release topical dosage form containing microspheres for Ketorolac Tromethamine (KT). Oral consumption of KT has significant gastric irritation, hence tried to prepare topical formulation to prevent possible side effects of oral consumption. The drug-excipients compatibility studies were carried out by FT-IR and DSC studies. Based on the results, excipients used were found to be compatible with KT. The formulations were prepared by using different concentration of polymer and plasticizer along with other excipients, and using 0.008% benzalkonium chloride as a preservative. The concentration of polymers was in the concentration range of 1.0%-2.5%, where plasticizer concentration range was 15-25%. The formulation F8 resulted in drug content 99%±0.36, spreadability 9±0.50gm-cm/sec, viscosity of 13420cps and maximum in-vitro diffusion of 47.37±0.39% over a period of 5 hrs which was selected as a best batch. The microspheres prepared by solvent evaporation method were evaluated and M3 batch was selected. M3 formulation of microspheres was incorporated into gel formulations F5 to F8. F11 selected as an optimized gel formulation containing KT microspheres which diffused 43.97±0.23% after 5 hrs. The selected optimized formulation F11 was subjected to stability studies as ICH guidelines and were found to be stable. Hence the formulation F11 will eliminate the GIT side effect, enhance the percutaneous absorption and exhibit sustained release anti-inflammatory activity.