The objective of this investigation was to explore the effects of drug solubility on the evolution of matrix dimensions and gel layer's during drug release and investigate the relationship between these effects and the mechanism and the rate of drug release. Two hydrophilic swellable polymers Polyox (POL) and cross-linked Carbopol (CARB) were employed as carriers. Caffeine (CAF) and theophylline (THE), two drugs having similar chemical structure but different aqueous solubility, were used as model drugs. Both drug and polymer characteristics were found to influence the dimensional changes of matrices and the development of the gel layer formed around the glassy core. The dimensional expansion in CAF matrices was always more pronounced than the THE matrices. Also the CARB matrices demonstrated greater maximum expansion and lower drug release than the POL matrices, due to a smaller degree of erosion of CARB. The dimensions of CARB/CAF matrices, unlike all the other matrices studied, exhibited a biphasic increase at early times, which was attributed to the cross-linked structure of CARB and the high solubility of CAF. With both polymers, a thinner gel layer was developed in the matrices containing the less soluble THE compared to the CAF matrices. The thickness of the gel layer increased continuously with time in the CAF matrices whereas it increased initially and after reaching a maximum started to decrease in THE matrices. All formulations except those of CARB/THE exhibited burst release, which depended on drug and polymer characteristics. The gel layer thickness and erosion rate appeared to determine the rate of drug release from the CARB and POL formulations. The results clearly indicate that for these matrices gel thickness and fluctuation of gel thickness affect the release rate/h of drug proportionally. Analysis of the release kinetics indicated that CAF was released mainly through diffusion whereas, THE was released mainly through matrix erosion.