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Present study describes the development of a new formulation of levonorgestrel and ethinylestradiol based on double emulsion-solvent evaporation technique using poly(epsilon-caprolactone) (PCL) as biodegradable polymer. The effect of polymer concentration on microspheres and entrapment of drug into microspheres were studied. PCL was selected because of its hydrophobicity and advantages over other biodegradable polymers. Characterization of biodegradable polymer used for controlled drug delivery is essential to ensure reproducibility of in vitro and in vivo performances. The selected characterisation techniques established for PCL microspheres include its loading and entrapment efficiencies, DSC to analyse thermal behaviour, SEM to observe surface morphology, drug content of microspheres and in vitro release of drugs from microspheres. The SEM reports showed that microspheres were with smooth surface and DSC thermograms revealed no interaction between drug and polymer. The entrapment was found to be 58 and 47% for 1:10 and 1:5 batches and in vitro release studies showed that about 69.7% of LNG and 66.7% of EE from 1:10 batch and about 80% of LNG and 75.5% of EE from 1:5 batch for 150 days.