The main goal of periodontal regeneration is to be achieved by epithelial exclusion, periodontal ligament cell activation or alveolar bone regeneration. The purpose of this study was to investigate on the physico- chemical and biological characteristics of biodegradable chitosan beads. Chitosan beads were fabricated by ionic gelation with sodium tripolyphosphate and they had the size in 300um diameter. As therapeutic agent, flurbiprofen was incorporated into the beads by 10, 20% loading contents. The release of drugs from the chitosan beads was measured in vitro. Also, biological activity tests of flurbiprofen loaded chitosan beads including cytotoxicity test, ihhibition of $IL-1{eta}$ production, suppression to $PGE_2$ production, collagenase inhibition test, the ability of total protein synthesis, and tissue response were evaluated. The amount of flurbiprofen released from chitosan was 33-50% during 7 days. Minimal cytotoxicity was observed in chitosan beads. Flurbiprofen released from chitosan beads significantly suppressed the $IL-1{eta}$ production of monocyte, $PGE_2$ production and markedly inhibited collagenase activity. Meanwhile, flurbiprofen released from this system showed increased ability for protein synthesis. Throughout 4 -week implantation period, no significant inflammatory cell infiltrated around chitosan bead and also fibroblast like cell types at the beads - tissue interface were revealed with gradual degradation of implanted chitosan beads. From these results, it was suggested that flurbiprofen loaded chitosan beads can be effectively useful for biocompatible local delivery system in periodontal regeneration.