Adverse effects and gastrointestinal toxicity limit the use of Diclofenac, a frequently-used NSAID for treatments of rheumatic disorders and other chronic inflammatory diseases. Diclofenac-carrier formulations may alleviate adverse effects, increase efficacy and allow local administration. We report here our first step, biophysical and biochemical investigations of Diclofenac formulated in our previously-developed bioadhesive liposomes carrying hyaluronan (HA-BAL) or collagen (COL-BAL) on their surface. Both liposome types encapsulated Diclofenac at high efficiency, encapsulated doses reaching 13 mg drug/ml, and performed as sustained-release Diclofenac depots, half-lives of drug release (under fastest conditions) ranging from 1 to 3 days. Therapeutic activity of liposomal Diclofenac was evaluated in CT-26 cells that possess the CD44 hyaluronan receptors and integrins, and are a bench-mark for intracellular COX enzymes. HA-BAL and COL-BAL showed high cellular-affinity that was 40 fold and 6 fold over that of regular liposomes. Free, and liposome-encapsulated, Diclofenac showed similar activities. For example: 2-3nM Diclofenac given to intact cells generated COX-inhibition levels in the range of 60-70% for free drug and for encapsulated drug in COL-BAL and in HA-BAL. We propose these novel Diclofenac formulations possess key physicochemical and biochemical attributes for task performance, meriting the next step into in vivo studies.