The purpose of present work was to develop suppositories containing mucoadhesive microspheres of granisetron hydrochloride (GH) using combination of xanthan gum and sodium alginate. Twelve different batches of microspheres containing GH were prepared by simple emulsification method and evaluated for surface morphology, particle size, equilibrium swelling degree, drug content, in vitro mucoadhesion, and in vitro drug release. The suppositories containing optimized batch of microspheres (C2) were formulated by fusion method using hydrophilic and lipophilic polymer base. The suppositories were evaluated for weight variation, hardness, macromelting range, drug content, drug release, morphology of rectal tissues, and in vivo suppository localization. Results show that, all microsphere batches were spherical and had size range $23.56-36.76{mu}m$. The % drug encapsulation was found in the range 61.67-92.30 %, and showed satisfactory mucoadhesion. Especially, C2 batch had 83.67 % mucoadhesion and 92.30 % drug encapsulation and showed release retardation for 4 h. The results of all suppositories were within the pharmacopoeial standard limits. Drug content of all the suppositories was in the range 93.20-98.40 %. The suppository batch (P2M) was considered best on the basis of optimum retardation up to 5 h, high drug content, optimum mechanical strength and zero order release ($r^2$ = 0.9860). The suppository of batch P2M showed no morphological changes in rectal tissues indicating its safety. In vivo localization revealed satisfactory mucoadhesion of microspheres. Hence, it can be concluded that, delivery of GH in suppository form can avoid its presystemic metabolism, thus, may be an efficient alternative to its oral dosage form and conventional suppository.