The present study reports the folic acid (FA) functionalized insulin loaded stable liposomes with improved bioavailability following oral administration. Liposomes were stabilized by alternating coating of negatively charged poly(acrylic acid) (PAA) and positively charged poly(allyl amine) hydrochloride (PAH) over liposomes. Furthermore, folic acid was appended as targeting ligand by synthesizing folic acid-poly(allyl amine) hydrochloride conjugate. The insulin entrapped within the freeze-dried formulation was found stable both chemically as well as conformationally and developed formulation exhibited excellent stability in simulated biological fluids. Caco-2 cell and ex vivo intestinal uptake studies revealed higher uptake of folic acid functionalized layersomes in comparison with their plain counterparts. In vivo pharmacodynamic and pharmacokinetic studies further revealed almost double hypoglycemia and approximately 20% relative bioavailability in comparison with subcutaneously administered standard insulin solution. Overall the proposed strategy is expected to contribute significantly in the field of designing ligand-anchored, polyelectrolyte-based stable systems in drug delivery.