The aim of the present investigation was to develop controlled porosity osmotic system for poorly water-soluble drug based on drug in polymer-surfactant layer technology. A poorly water-soluble drug, glipizide (GZ), was selected as the model drug. The technology involved core of the pellets containing osmotic agent coated with drug dispersed in polymer and surfactant layer, finally coated with release-retardant layer with pore former. The optimized drug-layer-coated pellets were evaluated for solubility of GZ at different pH conditions and characterized for amorphous nature of the drug by differential scanning calorimetry and X-ray powder diffractometry. The optimized release-retardant layer pellets were evaluated for in vitro drug release at different pH, hydrodyanamic, and osmolality conditions. The optimized drug layer showed improvement in solubility (10 times in pH 1.2, 11 times in pH 4.5, and 21 times in pH 6.8), whereas pellets coated with cellulose acetate (15.0%, w/w, weight gain) with pore former triethyl citrate (10.0%, w/w, of polymer) demonstrated zero-order drug release for 24h at different pH conditions; moreover, retardation of drug release was observed with increment of osmolality. This system could be a platform technology for controlled delivery of poorly water-soluble drugs. © 2012 Wiley Periodicals, Inc.