Ligusticum chuanxiong oil is a kind of volatile oil from rhizome of ligusticum Chuanxiong (VOC). It is pharmacologically active in treating a variety of diseases. However, the instability and poor water solubility have limited its further clinical application. In the present study, a self-microemulsifying drug delivery system (SMEDDS) was developed and SMEDDS based formulation – VOC-SMEDDS capsules were prepared to improve the water solubility of Ligusticum chuanxiong oil as well as to enhance VOC oral absorption. The VOC microemulsions were composed of chuanxiong oil, Tween-80 and propylene glycol at the optimized ratio of 0.6:0.32:0.08 (w/w), the average size of which was less than 50 nm upon dilution with water, and the particles of which were observed round-shaped under microscopy. The solubility study indicated that up to 90% of VOC-SMEDDS capsules dissolved in 20 minutes. The stability test showed the VOC-SMEDDS capsules maintained stable in 6 months. In situ absorption study demonstrated the absorption rate of VOC-SMEDDS capsules was 2.53 and 1.59 times higher than that of VOC and VOC/β-Cyclodextrin inclusion (β-CD), and the percent absorption (PA) of which was 1.55 and 28.19 times higher than that of VOC and VOC/β-CD, respectively.