The purpose of the research was to prepare Orlistat niosomes from proniosome to improve its poor and variable oral bioavailability. The non-ionic surfactant vesicles are prepared by the reverse phase evaporation technique (slurry method). The slurry of - Cyclodextrin and Span 60 was dried to form a free flowing powder in rotary flash evaporator which could be rehydrated by addition of buffer (0.5% NaCl with 3% SLS at pH 6.0). The lipid mixture consisted of cholesterol, Span 60 and - Cyclodextrin carrier in molar ratios of (0.1:0.9:1 to 0.9:0.1:1 respectively). The niosomal formulations were evaluated for particle size, entrapment efficiency, in-vitro drug release, release kinetics, Interactions and compatibility (FT-IR), surface morphology (SEM), stability studies, conductivity and sedimentation rate, pH density, viscosity. The formulation OT9 which showed higher entrapment efficiency of 44.09% and invitro releases of 94.59% at the end of 12hrs was found to be best among all the 9 formulations. Release was best fitted with Hixson kinetics and it shows that the drug release may follow diffusion mechanism. FT-IR data revealed that, compatible and there were no interactions between the drug and excipients added in the formulation. SEM images of niosomes with various magnifications revealed the mean size of the niosomes were 100 nm with smooth surface. Niosome formulation has showed appropriate stability for 90 days by storing the formulation at room temperature. Thus the niosomal formulations could be a promising delivery system for Orlistat with improved oral bioavailability, stability and for sustained drug release.