Objective: Wireless capsule endoscope (WCE) is a revolutionary approach to diagnose small bowel pathologies. Currently available WCEs are mostly passive devices with image capturing function only, while on-going efforts have been placed on robotizing WCEs or to enhance them with therapeutic functions. In this paper, the authors present a novel inflatable WCE for haemostasis in the gastrointestinal (GI) tracts by balloon tamponade effect. Methods: The proposed wireless capsule consists of a balloon that can be inflated using the endothermic reaction of acid and base. When the balloon reached a precalculated pressure level, it is able to stop at a bleeding site in the bowel, and achieve haemostasis by tamponade effect. The prototype is 14 mm in diameter, with three sections of 13, 35, and 12 mm in length, respectively. The three sections are linked together with flexible joints and enclosed in a silicone balloon. The prototypes were tested in ex vivo porcine intestine models. Results: In the ten ex vivo trials conducted, the inflatable wireless capsule achieved average balloon pressure of 46.0 mmHg and withstood average maximum longitudinal pulling force at 1.46 N. An in vivo study was carried out as a proof-of-concept for treating bleeding in a porcine model. The proposed inflatable WCE succeeded in the animal test by controlling haemostasis within 5 min. No rebleeding was observed in the next 20 min. Conclusion: The results suggested that the inflatable capsule with a real-time bleeding detection algorithm can be implemented. Moreover, the proposed inflatable WCE prototype can achieve haemorrhage control in the lower GI. Significance: To our best knowledge, this is the first study that demonstrated the potential to treat GI haemorrhage by an inflatable WCE. The proposed capsule enables the development of a closed-loop system based on a body sensor network to provide early treatment of GI bleeding for p-medicine.