Purpose. The purpose of present study is to formulate microemulsion composed of oleic acid, phosphate buffer, Tween 80, ethanol and to investigate its potential as drug delivery system for an antitubercular drug isoniazid. Materials and Methods. The pseudo-ternary phase diagram (Gibbs Triangle) was delineated at constant surfactant/co-surfactant ratio (Km 0.55). Changes in the microstructure were established using conductivity (sigma), viscosity (eta), surface tension (gamma) and density measurements. Dissolution studies and particle size analysis were carried out to understand the release of isoniazid from the microemulsion formulation. Further, partitioning studies and spectroscopic analysis (FT-IR and H-1 NMR) was performed to evaluate the location of drug in the colloidal formulation. Results. Physico-chemical analysis of microemulsion system showed the occurrence of structural changes from water-in-oil to oil-in-water microemulsion. It has been observed that the microemulsion remained stable after the incorporation of isoniazid (in terms of optical texture, pH and phase separation). The changes in the microstructure of the microemulsion after incorporation of drug was analyzed on the basis of partition studies of isoniazid in microemulsion components and various parameters viz pH, sigma, eta,gamma. In addition, the particle size analysis indicates that the microemulsion changes into o/w emulsion at infinite dilution. The spectroscopic studies revealed that most of the drug molecules are present in the continuum region of an o/w microemulsion. Dissolution studies infer that a controlled release of drug is expected from o/w emulsion droplet. In the present system the release of isoniazid from microemulsion was found to be non-Fickian. Conclusion. The present Tween based microemulsion appears beneficial for the delivery of the isoniazid in terms of easy preparation, stability, low cost, sustained and controlled release of a highly water soluble drug.