The present invention relates to an oral pharmaceutical composition of mycophenolic acid or salts thereof. In particular, the present invention relates to the pharmaceutical compositions comprising lactose and microcrystalline cellulose (MCC), wherein the ratio of amount of lactose to MCC is in the range of about 1.0:6.0 to about 6.0: 1.0. The invention also includes process of preparing such composition and their use in prophylaxis of organ rejection in patients receiving allogeneic renal transplants.