ABSTRACT Background Canagliflozin is broadly implicated for the management of type 2 diabetes mellitus. Unfortunately, it has low oral bioavailability due to poor solubility behaviour and restricted membrane permeability. Objective The current work focuses on development of canagliflozin encapsulated niosomes for enhanced oral anti-diabetic efficacy. Methodology Niosomes comprising span 60 and cholesterol were formulated both in absence and presence of olive oil or flaxseed oil. These were evaluated in vitro for average vesicular size, structural morphology, canagliflozin entrapment efficiency, and drug release. Additionally, the oral hypoglycemic effect of canagliflozin encapsulated niosomes was explored in diabetic rats. Results: The fabricated niosomes were negatively charged spherical vesicles with a size range of 103.0- 141.7nm. These entrapped canagliflozin with efficiency ranging from 92.3% to 96.0%. Drug release investigations reflected that incorporating canagliflozin into niosomes significantly sustained drug release compared to the aqueous drug dispersion. Oral administration of niosomal formulations significantly enhanced the oral antidiabetic effect of canagliflozin. Comparing the tested niosomes, similar efficiency was shown eliminating the effect of composition. Conclusion The enhanced oral bioavailability of niosomes’ encapsulated drugs is related to niosomal vesicular structure which allows intact niosomes absorption. The study presented niosomes as promising carriers for improved oral anti-diabetic activity of canagliflozin.