Fatty acid microspheres based on stearic and palmitic acids are known to form effective taste masking systems, although the mechanisms by which the drug is preferentially released in the lower gastrointestinal tract are not known. The objective of the present study was to identify the mechanisms involved, with a particular view to clarify the role of acid soap formation in the dissolution process. Microspheres were prepared by a spray chilling process. Using benzoic acid as a model drug and an alkaline dissolution medium, a faster drug release was observed in the mixed fatty acid formulation (50:50 stearic:palmitic acid (w/w)) compared to the single fatty acid component systems. Thermal and powder X-ray diffraction studies indicated a greater degree of acid soap formation for the mixed formulation in alkaline media compared to the single fatty acid systems. Particle size and porosity studies indicated a modest reduction in size for the mixed systems and an increase in porosity on immersion in the dissolution medium. It is proposed that the mixed fatty acid system form a mixed crystal system which in turn facilitates interaction with the dissolution medium, thereby leading to a greater propensity for acid soap formation which in turn forms a permeable liquid crystalline phase through which the drug may diffuse. The role of dissolution of palmitic acid into the dissolution medium is also discussed as a secondary mechanism.