Background: prednisolone (PRD) is a very bitter, corticosteroid drug, acts as immunosuppressant and anti-inflammatory used for treatment of many diseases like asthma and arthritis. Objective: This study aimed to formulate and evaluate taste masked PRD-alginate beads to increase patient compliance. Method: PRD taste masked beads were prepared by external ionic gelation technique using sodium alginate (S. Alg) as polymer and 1% calcium chloride as cross linker. The beads were evaluated for their physical properties including general appearance, percentage yield, drug loading, drug content and in vitro taste masking. The effect of S. Alg concentration, addition of tween, addition of hydrophilic polymers (Carbopol 940, PEG 4000, HPMC E5 and PVA) on the physical properties of beads was studied Result: This method was successful in decreasing the release of PRD from beads in phosphate buffer pH 6.8 within 60 seconds. The optimum formula (F6) was obtained by using S. Alg (0.5% W/W) in combination with carbopol 940 in a ratio of 1:1:1 ratio (PRD: S. Alg: Carbopol 940)   with percentage yield 88%, drug loading 77%, drug content 98.3 ± 2.1 and 0.77 % ± 0.19 release of PRD in phosphate buffer pH 6.8 within 60 seconds, supposing good taste masking. Conclusion: It can be concluded that oral preparation of PRD with an acceptable taste is possible by using external ionic gelation technique.