The present research work explores an innovative technological solution to constraints in efficient oral delivery of poorly water-soluble anti-obesity drug orlistat. Nanoemulsion of orlistat and its subsequent transformation into multi-unit pellet system (MUPS) for improved oral delivery was developed. Orlistat nanoemulsion was developed with capryol PGMC as an oil phase and cremophor RH40 as an emulsifier using high-pressure homogenization. Influence of critical processing parameters on globule size distribution, polydispersity index and physical stability of nanoemulsion was evaluated. The optimized nanoemulsion was transformed into MUPS using an extrusion spheronization technique. Optimized formulation was characterized at nanoemulsion as well as MUPS stage. DLS and nanoparticle tracking analysis studies of orlistat nanoemulsion exhibited unimodal size distribution with polydispersity value <0.1. Confocal laser scanning microscopy (CLSM) studies confirmed the presence of uniform spherical nanosized oil droplets of nanoemulsified orlistat. DSC and PXRD studies of MUPS confirmed amorphization of embedded nanoemulsified orlistat. In-vitro dissolution studies in surfactant-reduced media demonstrated remarkable improvement in dissolution compared to pure orlistat and marketed formulation (Xenical Capsules 120 mg, Hoffman-La Roche, Basle, Switzerland). Comparative in-vitro bovine porcine pancreatic lipase inhibition studies of pure orlistat, marketed product and developed MUPS showed 13.57- and 2.41-fold higher lipase inhibition with developed MUPS compared to pure orlistat and marketed products, respectively. © 2014 Informa Healthcare USA, Inc.