Niosomes vesicles are microscopic lamellar structures formed by mixing with nonionic surfactant, cholesterol and phosphate in aqueous media. Using niosomes as drug delivery system affords several significant advantages over conventional drug therapy. The main aim of this study was to formulate suitable niosome-encapsulated drug delivery for tenoxicam (antiinflammatory drug) and estimate the percentage encapsulation efficiency, in-vitro release and in-vivo anti-inflammatory effect. Different non-ionic surfactants, cholesterol and different charge inducing agents were used in different molar ratios. Three different methods were used for niosomes preparation. The higher entrapment efficiency was observed with niosomes prepared from span 40, cholesterol and stearylamine in 45:45:10 molar ratios (N11). The invitro release study was found that niosomes exhibiting higher entrapment efficiency showed slower release rate of drug than other formulae. The results of in-vivo study revealed that the niosomes significantly enhanced the anti-inflammatory effect of tenoxicam. The present work concluded that tenoxicam loaded niosomes was effective in sustaining the drug release resulting in diminished side effects and improved patient compliance.