Encapsulation of Ganciclovir in lipophilic vesicular structure may be expected to enhance the oral absorption and prolong the existence of the drug in the systemic circulation. So the purpose of the present study was to improve the oral bioavailability of Ganciclovir by preparing nanosized niosomal dispersion. Niosomes were prepared from Span40, Span60, and Cholesterol in the molar ratio of 1:1, 2:1, 3:1, and 3:2 using reverse evaporation method. The developed niosomal dispersions were characterized for entrapment efficiency, size, shape, in vitro drug release, release kinetic study, and in vivo performance. Optimized formulation (NG8; Span60:Cholesterol 3:2 molar ratio) has shown a significantly high encapsulation of Ganciclovir (89±2.13%) with vesicle size of 144±3.47 nm (polydispersity index [PDI]=0.08). The in vitro release study signifies sustained release profile of niosomal dispersions. Release profile of prepared formulations have shown that more than 85.2±0.015% drug was released in 24 h with zero-order release kinetics. The results obtained also revealed that the types of surfactant and Cholesterol content ratio altered the entrapment efficiency, size, and drug release rate from niosomes. In vivo study on rats reveals five-time increment in bioavailability of Ganciclovir after oral administration of optimized formulation (NG8) as compared with tablet. The effective drug concentration (>0.69 µg/mL in plasma) was also maintained for at least 8 h on administration of the niosomal formulation. In conclusion, niosomes can be proposed as a potential oral delivery system for the effective delivery of Ganciclovir.