The present research investigates development and in vivo evaluation of oral diacerein formulations with quicker and complete absorption. In vivo, diacerein gets completely metabolized to its active metabolite rhein in gut and liver, which is the only analyte detected in plasma. Incomplete absorption of diacerein from the formulation leads to colonic availability of rhein, which is associated with increased laxative effect as one of the side effects of diacerein therapy. Thus solubility improved immediate release formulation (IR) and a gastroretentive formulation (GR) was designed to achieve rapid absorption preferentially through upper part of gastro-intestinal tract; thus controlling the amount of rhein reaching to colon and minimizing the associated increased laxative effect. In vitro drug release studies of the developed formulations revealed faster and complete release of diacerein from IR and GR formulations compared to commercially available diacerein capsule Art50. Comparative bioavailability studies conducted in healthy human volunteers revealed 1.7 fold and 1.2 fold rise in AUC(0-6h) for IR and GR formulations respectively, compared to Art50 capsules. A Levy plot analysis comparing association between the time of in vitro dissolution (Tvitro) of diacerein and time of in vivo absorption (Tvivo) of rhein confirmed faster release and absorption from upper part of gastrointestinal region for both the optimized formulations.