The biological effects of ginsenosides are limited by their low oral bioavailability. This study aimed to investigate the effects of particle size reduction and dispersants on the dissolution and bioavailability of ginsenosides in ginseng. Fine ginseng powder (FGP), ultrafine ginseng powder (UGP), and ultrafine ginseng powder with β-cyclodextrin as the dispersant (UGPD) were prepared using a planetary ball mill from coarse ginseng powder (CGP, as the control). The particle size, morphology, hydration, thermal properties, and in vitro dissolution behavior of ginseng powders were characterized. The relative oral bioavailability of ginsenosides (9 protopanaxadiol (PPD)-type and 7 protopanaxatriol (PPT)-type) was determined in a rat model. Both UGP and UGPD displayed improved physiochemical properties (e.g. reduced particle size, increased hydration and thermal properties). The total in vitro dissolution of ginsenosides from UGPD was ∼17.2% higher than that from CGP; in contrast, UGP did not differ from CGP. More importantly, the in vivo pharmacokinetic study showed that the relative bioavailability of a total of 16 ginsenosides in UGPD was 180.1 ± 9.9% (CGP set as 100%), which was significantly greater than that in FGP and UGP. This suggested that dispersants were essential for preserving the benefits of ultrafine milling by preventing ultra-pulverization induced agglomeration. In particular, PPD-type ginsenosides showed similar deglycosylation trends in in vitro and in vivo experiments; in contrast, the deglycosylation states of PPT-type ginsenosides varied, which might be attributed to the relatively low abundance, glycosylation linkage, and potential involvement of the gut microbiota metabolism. Conclusively, ultrafine milling combined with a dispersant provides a simple and scalable manufacturing process that can effectively improve the bioavailability of ginseng products.