The objective of the present study was to produce extended release nateglinide nanosponges for oral delivery. Preparation of nanosponges leads to solubility enhancement. Nateglinide is a BCS Class II drug, having low solubility. So, to increase the solubility of nateglinide it is formulated into nanosponges. Nanosponges using ethyl cellulose as a polymer and dichloromethane as a cross-linker were prepared successfully by ultra-sound assisted synthesis method. The effects of different drug: placebo ratios on the physical characteristics of the nanosponges as well as the drug content and in vitro drug release of the nanosponges were investigated. Particle size analysis and surface morphology of nanosponges were performed. The scanning and transmission electron microscopy of nanosponges showed that they were spongy in nature. The particle size was found to be in the range 46.37 - 97.23 nm out of which particle size of the optimized formulation was 51.79 nm and the drug content was found to 79.43 %. The optimized nanosponge formulations were selected for preparing nanosponge tablets for extended drug delivery by oral route. These tablets were prepared using xanthan gum and PVP K-30 and were evaluated by pre-compression and post-compression parameters. The nateglinide nanosponges tablet formulation were studied for different parameters using Design Expert Software. All formulations were evaluated for in vitro drug release analyzed according to various release kinetic models and it was found that it follows zero order release kinetics.