The current study was aimed to develop stable and reproducible liposomal formulations of Diclofenac sodium (DFS) and Diclofenac potassium (DFP) using purified soya lecithin (PSL) and purified egg lecithin (PEL) for oral delivery. For the accomplishment of analysis task of DFS and DFP in In-vitro/In-vivo evaluation as well as for entrapment studies, two simultaneous methods were developed and validated. In one study for analysis of DFS, an isocratic system was employed for the flow of mobile phase consisting of 10 mM sodium dihydrogen phosphate buffer and acetonitrile in molar ratio of 67: 33 with adjusted pH of 3.2. The stationary phase was hypersil ODS column (C18, 250×4.6 mm i.d., 5 μm) with controlled temperature of 30 ̊C. DFS in liposomes, microcapsules and marketed drug products was determined in range of 99.76-99.84%. FLP and TMD in microcapsules and brands formulation were 99.78 - 99.94 % and 99.80 - 99.82 %, respectively. Single step liquid-liquid extraction procedure using combination of acetonitrile and trichloroacetic acid (TCA) as protein precipitating agent was employed. The detection limits (at S/N ratio 3) of quality control solutions and plasma samples were 10, 20, and 20 ng.mL-1 for DFS, FLP and TMD, respectively. The Assay was acceptable in linear dynamic range. All other validation parameters were found in limits of FDA and ICH method validation guidelines. The proposed method for DFS analysis was found as sensitive, accurate and precise and applied for dissolution studies as well as in human plasma samples for bioequivalence and pharmacokinetics studies. For analysis of DFP, a new, easy and consistent reversed-phase high- performance liquid chromatographic method with diode array detection was developed and validated for DFP and MLX (Meloxicam. The optimized mobile phase was used in the molar ratio of 20:20:60 (v/v/v) mixture of acetonitrile, methanol and 20 x 10-3 M potassium dihydrogen phosphate buffer (pH 3.7), pumped at an optimized flow rate of 1.0 mL.min-1. The linearity was performed in the concentration range of 15 ng.mL−1 to 10μg.mL-1 with r2 values of 0.9989 ± 0.13 and 0.9979 ± 0.11 (n = 6) for DP and MLX, respectively. The assay was repeatable at concentration levels of 10 ng.mL-1, 1 μg.mL-1 and 10 μg.mL-1 with coefficient of variation of 0.168 - 0.603% for 10 ng.mL-1 (DP), 15 ng.mL-1 (MLX) and 1 μg.mL-1 &10 μg.mL-1 for DP and MLX. The LOD values were 0.3 and 0.5 ng.mL−1, while values of LOQ were 10 ng.mL-1 and 15 ng.mL-1, for DP and MLX. The present method was applied in advanced drug delivery formulations (Liposomes), In-vitro and In-vivo studies. An important part of study was development of an optimized liposomal formulation of diclofenac sodium (DFS) of most suitable concentration of formulating ingredients, soya lecithin (SL) and Cholesterol (CH) with maximum entrapment efficiency. For this purpose, response surface methodology (RSM) was used to optimize formulation variable. Cholesterol was selected as independent variable 1 and designated as X1 while soya lecithin was independent variable 2 designated as X2. The response was the entrapment of drug and designated as dependent variable Y. The two formulation ingredients were ranged with central composite rotatable design (CCD) and quadratic model at five levels (α=1.267) was followed for blending the liposomal formulation. It was observed that cholesterol (variable 1) may decrease the entrapment of DFS in the order of increasing concentration while soya lecithin (variable 2) was found to increase entrapment (dependant variable, Y) with increasing concentration. The central composite design has resulted in an optimized formulation (Formulation No. 9) with an optimum concentration of cholesterol and soya lecithin (ratio of 25:75) with maximum of entrapment of 82.56%. The study was also extended to compare different methods employed for the preparation of liposomes using optimized formulation by RSM. It was concluded that formulation prepared by micro- emulsification evaporation (MEE) followed by freeze drying method showed maximum entrapment of DFS. A comprehensive study was conducted for development of liposomal formulations of DFS and DFP with variable concentrations of purified soya lecithin (PSL) and purified egg lecithin (PEL) employing micro-emulsification evaporation method (MEE) followed by freeze drying. The prepared liposomes were free flowing and of uniform particle size distribution in the rage of 1.01 ± 0.011 to 1.80 ± 0.008 μm for DFS liposomal formulations while the mean size of (mean ± SEM) 1.94 ± 0.008 μm for diclofenac potassium (DFP). The selected liposomal formulations of DFS and DFP were also characterized by using scanning electron microscopic studies (SEM), differential scanning calorimetry (DSC), x-ray diffractometry (XRD) and fourier transform infra-red spectroscopy (FT-IR). Drug entrapment efficiency was above 82%. The entrapping efficiency and in-vitro release of DFS and DFP of all liposomal formulations were determined by reversed phase high-performance liquid chromatography (RP-HPLC). Different kinetics models of in-vitro were applied and release of DFS and DFP from liposomal formulations of DFS and DFP and it was concluded that release followed higuchi model and relatively zero order release, calculated on the basis of r2 value of straight line fit equation. A sustained release was observed for 16-24 hours from all range of liposomal formulations. The selected formulations after similarity factor (f-2) were subjected to in-vivo evaluation in eighteen healthy human subjects. Present study results in new formulation of DFS and DFP using PSL and PSL for oral delivery, which was found stable, reproducible and sustained release by using modified micro-emulsification evaporation method (MEE) followed by freeze drying which was found a probable and better to produce liposomes for oral drug delivery system (ODDS). Keywords: Liposomes; Phospholipids; Diclofenac sodium; Diclofenac potassium; Validation; Response surface Methodology (RSM), micro- encapsulation vesicle method (MEE); In-vitro Release; Kinetics Models; Higuchi Model; In-vivo studies.