This study aimed to develop and characterize indomethacin-phosphatidylcholine complex (IPC) as a pellet formulation to enhance the oral bioavailability of poorly water-soluble indomethacin as well as potentially minimize its GI irritations. IPC with different ratio of indomethacin-phosphatidylcholine was prepared by the solvent evaporation method, and their physicochemical investigations such as Fourier transform infrared spectroscopy (FTIR), nuclear magnetic resonance (NMR), differential scanning calorimetry (DSC) and X-ray diffraction (XRD) confirmed the formation of the complex. NSAIDs bonded to phosphatidylcholine by cation-π interaction. 1:1 M ratio of indomethacin and phosphatidylcholine was selected as the eligible ratio of IPC and then used to prepare pellets via wet extrusion-spheronization technique. The size, shape, mechanical properties, surface morphology and in vitro drug release behavior of pellets were characterized. Pellets were found to be spherical, 500–1180 μm size and had >70% yield. Scanning electron microscopic (SEM) studies confirmed spherical shape and smooth surface of pellets. IPC pellets resulted in an improved dissolution of the drug (released >90%) compared with control formulation (released <50%) at pH 7.4 within 2 h. The results indicated successful incorporation of the indomethacin-phosphatidylcholine complex into pellets with the improved dissolution rate of the drug which may be considered for improved bioavailability of indomethacin.