This study outlines the development of a pH-sensitive hydrogel for hydrophobic drug delivery by cross-linking carboxymethyl cellulose (CMC) with varying fumaric acid (FA) concentrations (9%–26%). FTIR analysis of CMC–FA-26% hydrogel showed a prominent band at 1714 cm−1, indicating the formation of ester bond. Compression tests demonstrated increased strength with cross-linking density changing from 9 to 26%. Stress–strain analysis revealed plastic deformation beyond 80% strain, with compression stress rising from 0.12 ± 0.1 to 1.9 ± 0.1 MPa as FA content increased from 9 to 26%. Thermogravimetric analysis revealed higher weight reduction (25–28%) for CMC–FA-26% compared to CMC–FA-9% (16–18%) during the fumaric acid weight loss stage. Scanning electron microscopic (SEM) examination showed that the hydrogels had a porous structure, crucial for their swelling, drug loading, and release. According to the swelling results, swellability was decreased by increasing cross-linking degree, and increased by increasing pH values. In the biodegradability test, the CMC–FA-26% hydrogel showed 35% weight loss after 28 days, while the CMC–FA-9% hydrogel exhibited a 54% weight loss. To improve the compatibility between hydrophilic CMC and hydrophobic curcumin (CUR)/β-cyclodextrin (β-CD) was incorporated to the hydrogel. The solubility results showed that with varying the molar ratio of CUR:β-CD from 1:1 to 1:3, the mean UV–Vis absorption changed from 0.005 to 1.048. The variation of the medium’s pH from 1.2 to 12 resulted in a notable increase in the cumulative curcumin release, ranging from 5.91 to 46.63%. Drug delivery results indicated excellent drug release in alkaline medium, highlighting the hydrogel’s potential for targeted drug delivery of hydrophobic drugs in the gastrointestinal tract.