Abstract: The aim of present study was to improve the solubility of pioglitazone HCl a practically insoluble antidiabetic drug by using liquisolid technique. The in vitro release pattern of liquisolid tablets and directly compressed tablets were studied using USP-II apparatus. Different Liquisolid tablets were prepared using a mathematical model to calculate the required quantities of powder and liquid ingredients to produce acceptably flowable and compressible admixture. Avicel PH 102, Aerosil 200 and Sodium starch glycolate were employed as carrier, coating material and disintegrant respectively. The drug release rates of Liquisolid tablets were distinctly higher as compared to directly compressed tablets, which show significant benefit of Liquisolid tablets in increasing wetting properties and surface area of drug available for dissolution. The optimized formulation showed the higher drug release during ex-vivo and in-vivo study against conventional and marketed tablet preparation. The DSC and FT-IR studies conforms the no significant interaction between the drug and excipients used in Liquisolid tablets. From this study it concludes that the Liquisolid technique is a promising alternative and best suitable method for enhancing solubility of pioglitazone HCl.