Objectives: Raloxifene (RLX) is a BCS class II drug, with low aqueous solubility, extensive first pass metabolism and only 2 % bioavailability .Oral administration of RLX tablet exhibits side effects like hot flushes, musculoskeletal pain, venous thromboembolic events, nausea, vomiting and diarrhea. To overcome these limitations a mucoadhesive micro particulate system of RLX is developed, with the objective of overcoming hepatic first and improving oral bioavailability.Material and methods: Complexation of cyclodextrin (CD) with chitosan was evaluated using DSC. Nanoparticles of RLX with chitosan and glycol chitosan were developed using ionic gelation method and were evaluated for particle size, zeta potential, entrapment efficiency , and in-vitro and ex-vivo drug release.Results: The results revealed improved aqueous solubility of RLX due to formation of inclusion complex with Carboxymethyl-β-CD (CM-β-CD) and chitosan. The chemical nature of chitosan and anionic CD significantly affected the size, shape, zeta potential and entrapment efficiency of formed nanoparticles. The release of drug from the matrix of nanoparticles followed higuchi kinetics. Conclusion: Cyclodextrin-chitosan complexed RLX nanoparticles exhibited improved solubility of RLX with 27 % entrapment efficiency.