Vardenafil (VDF) is a relatively new phosphodiesterase-5 inhibitor that has limited oral bioavailability (15%). The objective of this study was to develop bilosome-based mucoadhesive buccal sponge for augmenting the oral bioavailability of VDF. VDF-loaded bilosomes were fabricated and optimized using a Box-Behnken design. The optimized VDF-loaded bilosomal formulation was assessed for surface morphology, particle size, thermal characteristics, and in vitro release. Afterwards, the optimized bilosomal formulation was incorporated into a cellulose-based matrix to obtain buccal sponge, which was evaluated for ex vivo permeation studies, in vivo oral bioavailability, and in vivo serum concentration of cyclic guanosine monophosphate (cGMP). The mean particle size and entrapment efficiency (%) of optimized bilosome formulation were 282.6  9.5 nm and 82.95  3.5%, respectively. In vitro release studies at pH 6.8 emphasized the potential of optimized bilosomal formulation to sustain VDF release for 12 h. Ex vivo permeation study using sheep buccal mucosa indicated significant enhancement in penetration of VDF from bilosomal buccal sponge compared to plain VDF gel. Pharmacokinetic study in Albino rats showed ~5 fold increase in relative bioavailability with bilosomal buccal sponge, compared to VDF suspension. In addition, VDF-loaded bilosomal buccal sponge triggered higher serum levels of cGMP, a biomarker of VDF in vivo efficacy, compared to oral VDF suspension. To sum up, bilosomes might represent a potential nanocarrier for buccal delivery of VDF, enhancing its oral bioavailability and therapeutic efficacy.