The aim of this research work was to formulate SMEDS of carbamazepine. Carbamazepine is an anti-epileptic drug used from a long time in treatment of epilepsy but it has poor bioavailability when used as a conventional dosage form. The SMEDS of carbamazepine was prepared to enhance its bioavailability and its release rate was evaluated by its in-vitro release. The solubility of carbamazepine was determined in various oils, surfactants and co-surfactants. Pseudoternary phase diagrams were used to determine the microemulsion area of formulation. SMEDS of carbamazepine was evaluated for globule size, zeta potential, clarity, effect of centrifugation, assay, dilutability, refractive index, transmittance, and stability. Formulation development and screening was done based on Pseudoternary phase diagram and results were obtained from the evaluation tests mentioned above. The optimized formulation was further evaluated for its in-vitro release having formula containing surfactant Cremophore RH-40(25%), co-surfactant PEG-400 (25%), and oil Labrafill M 1944 CS (21.30 %). It was observed that the SMEDS formulation showed 85.63% release within 25 m. while conventional dosage form show only 27.95% release.