The aim of this study was to develop novel mucoadhesive pellets containing valsartan (VAL) with enhanced oral bioavailability. Two types of VAL loaded core pellets were prepared by an extrusion/spheronization method, and further dry-coated with a mixture of hydroxypropylmethylcellulose (HPMC) and carbomer (CB) at different ratios. The effects of the pellet core composition, HPMC:CB ratio and coating level on the drug release from the coated pellets were investigated. The physicochemical properties of the core and coated pellets were characterized by scanning electron microscopy (SEM), X-ray diffraction (XRD), differential scanning calorimetry (DSC) and Fourier transform infrared spectroscopy (FT-IR). In addition, the in vitro and in vivo mucoadhesion properties as well as the bioavailability of the coated pellets in rats were evaluated by using VAL suspension and core pellets as control preparations. The results of the release study demonstrated that the two types of core pellets, especially the pellets formulated with a solubilizer and a pH modulator gave considerably faster drug release than the VAL powder. However, the core and coated pellets exhibited similar release profiles indicating that the dry powder-coating did not retard the drug release. Strong molecular interactions were observed between the drug and the carriers in FT-IR analysis. The coated pellets displayed distinct mucoadhesive property in vitro and delayed gastrointestinal (GI) transit in vivo. Furthermore, the coated pellets exhibit significantly higher AUC(0-12h) and C(max), as compared to the core pellets and drug suspension. It was concluded that the mucoadhesive pellets could render poorly water soluble drugs like VAL with a rapid drug release, delayed GI transit and enhanced oral bioavailability.