Ziprasidone hydrochloride is a psychotropic agent. To reduce the frequency of administration and to improve patient compliance, a sustained-release formulation of Ziprasidone hydrochloride is desirable. The aim of the present work is to develop a hydrodynamically balanced drug delivery system based on the platform of direct compression. The system shall be designed to release at least 65% of the drug over a period of 8 hours and not less than 80% release in 12 hours. Sodium bicarbonate was incorporated as a gas-generating agent along with independent variables of natural resin olibanum, hydroxy propyl methyl cellulose (HPMC) grade K4M and hydroxy propyl methyl cellulose (HPMC) grade K100M at 25%, 35%, 45% and 60%, to achieve sustained release effect. The drug-excipient compatibility was studied with the help of Infrared-red spectroscopy. Dissolution studies using the USP basket method were performed at 37±0.5 ºC in 0.1N HCl and 2% SLS. Fourier transformer infrared spectroscopy (FTIR) was performed for the physicochemical interaction between drug and carrier, hence its effect on dissolution. It was observed that formulation containing 60% hydroxy propyl methyl cellulose (HPMC) grade K4M (F4) shows optimum sustained drug release pattern with adequate floating. Thus this technique can be successfully used for improvement of dissolution of ziprasidone hydrocholoride.