This study aimed to evaluate Poly (caprolactone) microparticles (MPs) loaded composite injectable Chitosan gel (CICGs) as a dual purpose (visco-supplement and intra articular drug delivery depot) therapeutic agent for the treatment of Osteoarthritis. Etoricoxib (COX-2 inhibitor), a highly hydrophobic drug was chosen as a model drug for the study. When administered orally, Etoricoxib poses severe cardiovascular toxicity issues. So, we have attempted to deliver this drug intra-articularly, which could retain the drug longer in the joint region and thus could ameliorate these toxicity issues. CICGs were prepared by dispersing MPs in the chitosan-Ammonium hydrogen phosphate solution and incubated at 37 °C. Rheology studies proved that gels were stable and had visco-elastic properties comparable to that of existing visco-supplements. The in vitro drug release profiles of CICGs were found to be more controlled when compared to MPs and bare chitosan gel (BCGs). In vitro and in vivo biocompatibility studies proved that the gels were biocompatible. In vivo synovial drug clearance studies proved that CICGs had a better drug retention capacity than BCGs and MPs. In vivo fluorescence imaging results confirmed that CICGs could stay longer in the joint region when compared to BCGs and MPs. Thus this novel CICGs could be a potential dual purpose gel for the treatment of diseased joint regions especially for Osteoarthritis. © 2015 Elsevier B.V. All rights reserved.