Silymarin is a natural lipotropic agent of low bioavailability from oral products. The aim of our study is to prepare buccal liposomal delivery system of silymarin with higher bioavailability. The effect of lecithin:cholesterol molar ratio on the percentage drug encapsulated was investigated. The influence of fluctuating the amount of added drug was also determined. The effect of additives such as positive charge inducer, negative charge inducer and surfactants was studied using two different 2(3) full factorial designs. Furthermore, additives used to optimize liposomal product were also investigated for their optimal concentrations, release properties and in vitro permeation and absorption through chicken cheek pouch. Optimal liposomal encapsulation efficiency was found at 7:4 lecithin to cholesterol molar ratio. A decrease in entrapment efficiency with increasing cholesterol content was observed. Tween 20 or Tween 80 beyond 0.5 molar ratio decreased the entrapment efficiency. Positively charged liposomes showed superior entrapment efficiency over neutral and negatively charged liposomes. Release studies as well as permeation and absorption studies showed that hybrid liposomes prepared according to formula 3 containing lecithin, cholesterol, stearyl amine and Tween 20 in 9:1:1:0.5 molar ratio, respectively, gave the best drug absorption and permeation. It showed steady state permeation through chicken cheek pouch for 6h. This is expected to improve the bioavailability of silymarin in the developed liposomal buccal delivery system, as the results show an increase in drug penetration compared to free drug powder.