Subcutaneous implantation is currently the most utilized routes of the potential of sustained drug delivery system. Present investigation attempts to prepare biodegradable subcutaneous implants of Diclofenac Sodium; nonsteroidal anti inflammatory agent used in treatment of orthopaedic patient care. Implant formulated in varied ratios of Gelatin and Sodium alginate i.e. 70:30, 80:20 and 90:10 % w/w by heating and congealing method. The implants were evaluated for content uniformity, thickness, weight variation, IR, in vitro release studies and stability studies at ambient temperature for 3 months. Implants were found to erode slowly with diffusion mechanism. In vivo studies in Rabbits revealed that at subdermal thigh region before and after one month of Implantation of polymeric rod, there was no inflammation at the site of implantation, foreign body grannuloma formation, necrosis or hemorrhage.