Cyclosporin is a first line immunosuppressive drug used to prevent transplant rejection and to treat autoimmune diseases. It is a hydrophobic cyclic peptide built from nonmammalian amino acids with low oral bioavailability. The aim of this study was to develop an oral delivery system for cyclosporin A (CyA) and investigate the effect of composition and particle size of the CyA lipid nanoparticles (lipospheres) on the oral bioavailability of this drug. Dispersible concentrated oil formulations that upon mixing in water spontaneously form a nanodispersion were developed. The concentrated oil formulations were clear solutions composed of the drug, a solid triglyceride, a water miscible organic solvent, and a mixture of surfactants and emulsifiers. The activity of the formulated cyclosporin was determined in vitro following the effect on the proliferation of T cells. The oral bioavailability was determined on humans following the cyclosporin blood levels after oral intake of formulated cyclosporin. Cyclosporin dispersion systems resulting in particle size of 25 to 400nm were prepared from acceptable pharmceutical components. The composition of the surfactants and emulsifiers, the lipid core component, and the amount and type of the water miscible organic solvent N-methylpyrrolidone (NMP) and alcohols had a strong effect on the particle size of the dispersions. All formulations were reproducible and stable at room temperature for at least 6 months, with full activity of cyclosporin retained. Human oral bioavaiability study indicated a correlation between the AUC and Cmax and the particle size of the dispersion. A Cmax of ∼1300 ng/mL was found after 2h of oral intake of four capsules, each loaded with 50mg cyclosporin. © 2004 Wiley-Liss, Inc. and the American Pharmacists Association J Pharm Sci 93:1264–1270, 2004