Phytosomes are novel herbal formulations in which herbal extract is surrounded by lipid layer to form cell like structure. Several water soluble phytoactive containing herbal extracts i.e. Flavonoids, Glycosides, Terpenoids are formulated using this technique. Flavonoids are the bioactive compounds possess broad therapeutic activities. Because of water soluble herbal extract and lipophilic outer layer phytosomes have better absorption phenomena and can show better bioavailability profile than the conventional herbal extracts containing dosage form. They are produced by process whereby the standardized plant extract or its constituents are bound to phospholipids, mainly phosphatidylcholine, producing a lipid compatible molecular complex. Formation of chemical bonds between phosphatidylcholine molecule and phytoconstituent produces better stability profile. The present work in which alcoholic herbal extract from citrus plant containing flavonoids, formulated in the form of phytosome and evaluated for hepatoprotective and anti-inflammatory activities shows promising results by lowering the marker enzymes level to establish it as a potent herbal therapeutic formulation.