Niosomes was developed and characterized for ocular drug delivery of diclofenac potassium. The present research study is a promising approach to improve corneal penetration and bio availability characteristics. Formulation also found to ensure a good entrapment efficiency and ocular bio availability of drug in-vivo. Niosome containing diclofenac potassium were prepared using surfactant and cholesterol in different ratio by Lipid film hydration technique. Niosomes were characterized For Entrapment efficiency, Particle size analysis, In-vitro drug release and In-vivo studies. Formulation with low cholesterol content which shown 82.1% Entrapment efficiency, 70.01% sustained release over a period of 10 h followed a non-fickian profile with zero order release profile. Scanning electron micrograph indicated that niosomes have a discrete spherical structure without aggregation. In-vivo study showed an availability of drug in aqueous humor for an extended time period even up to 8 hour and it showed a correlation with the release profile in-vitro. Niosome are considered the best as it showed good and high Entrapment efficiency and Vitro release with better bio availability.