The aim of present study was to extract pectin from dried citrus fruit peels. In order to increase profits for citrus fruit growers and processors, citrus fruit peels, a by-product of citrus fruit processing, were investigated as a source of pectin. Pectin extraction was optimized from this by-product. Pectin was extracted under pH 2; Ethanol ratios(ER) 1:1 and extraction periods 120 min, at this condition highest yield was obtained 18.21%. Pectin assess its binding property in tablets using paracetamol as a model drug. Thereafter, four batches were formulated using pectin in different proportions. A reference batch of starch was also prepared to carry out the comparative study and to assess the binding property of pectin. Pre-compression and post-compression studies were performed for each formulation and compared to range as per pharmacopoeias. In vitro dissolution studies revealed that batch M3 showed 81.88% drug released. In-vitro release kinetic of all four batches followed korsmeyer-peppas models. Citrus peel pectin can act as excellent binder in dosage forms. Since it is of natural origin and citrus peels available at low cost it may prove to be better binder over commercially used synthetic binders.