Diacerein is used for symptomatic relief and cartilage regeneration in osteoarthritis. Due to gastrointestinal side effects, poor aqueous solubility and low bioavailability, its clinical usage has been restricted. The objective of the present study was to enhance its dissolution profile and to attain sustained release by designing a novel delivery system based on niosomes. Five niosomal formulations (F1-F5) with nonionic surfactant (sorbitan monostearate) and cholesterol in varying ratios of 5:5, 6:4, 7:3, 8:2 and 9:1 were developed by the reverse-phase evaporation technique. The size and polydispersivity index (PDI) were found in the range of 0.608 μm to 1.010 μm and 0.409 to 0.781, respectively. Scanning electron microscopy (SEM) of the selected formulation (F3) revealed spherical vesicles, and 79.8% entrapment was achieved with F3 (7:3). Dissolution studies using the dialysis method showed sustained release behaviour for all formulations. The optimized surfactant-to-cholesterol concentration (7:3) in formulation F3 sustained the drug-release time (T50%) up to 10 hours. Kinetic modelling exhibited a zero-order release (R2=0.9834) and the release exponent ‘n’ of the Korsmayer-Peppas model (n=0.90) confirmed non-fickian and anomalous release. The results of this study suggest that diacerein can be successfully entrapped into niosomes using sorbitan monostearate and that these niosomes have the potential to deliver diacerein efficiently at the absorption site. © 2015, Faculdade de Ciencias Farmaceuticas (Biblioteca). All rights reserved.