The aim of the present report was to develop nonionic surfactant vesicles (niosomes) to improve poor and variable oral bioavailability of griseofulvin. Niosomes were prepared by using different nonionic surfactants span 20, span 40, and span 60. The lipid mixture consisted of surfactant, cholesterol, and dicetyl phosphate in the molar ratio of 125:25:1.5, 100:50:1.5, and 75:75:1.5, respectively. The niosomal formulations were prepared by thin film method and ether injection method. The influence of different formulation variables such as surfactant type, surfactant concentration, and cholesterol concentration was optimized for size distribution and entrapment efficiency for both methods. Result indicated that the niosomes prepared by thin film method with span 60 provided higher entrapment efficiency. The niosomal formulation exhibited significantly retarded in vitro release as compared with free drug. The in vivo study revealed that the niosomal dispersion significantly improved the oral bioavailability of griseofulvin in albino rats after a single oral dose. The maximum concentration (Cmax) achieved in case of niosomal formulation was approximately double (2.98 microg/ml) as compared to free drug (1.54 microg/ml). Plasma drug profile also suggested that the developed niosomal system also has the potential of maintaining therapeutic level of griseofulvin for a longer period of time as compared to free griseofulvin. The niosomal formulation showed significant increase in area under the curve0-24 (AUC; 41.56 microg/ml h) as compared to free griseofulvin (22.36 microg/ml h) reflecting sustained release characteristics. In conclusion, the niosomal formulation could be one of the promising delivery system for griseofulvin with improved oral bioavailability and prolonged drug release profiles.