Quetiapine fumarate (QF), an anti-schizophrenic drug, suffers from rapid elimination and poor bioavailability due to extensive first-pass effect. Intramuscularly (IM) injected lipospheres were designed to enhance the drug's bioavailability and extend its release. A central composite design was applied to optimize the liposphere preparation by a melt dispersion technique using Compritol® 888 ATO or glyceryl tristearate as lipid component and polyvinyl alcohol as surfactant. Lipospheres were evaluated for their particle size, entrapment efficiency, and in vitro release. The optimized QF lipospheres were prepared using a Compritol® 888 ATO fraction of 18.88% in the drug/lipid mixture under a stirring rate of 3979 rpm. The optimized lipospheres were loaded into a thermoresponsive in situ forming gel (TRIFG) and a liquid crystalline in situ forming gel (LCIFG) to prevent in vivo degradation by lipases. The loaded gels were re-evaluated for their in vitro release and injectability. Bioavailability of QF from liposphere suspension and bio-shielding in situ gels loaded with QF lipospheres were assessed in rabbits compared to drug suspension. Results revealed that the AUC obtained from the liposphere-loaded TRIFG was ∼3-fold higher than that obtained from the aqueous drug suspension indicating the bio-shielding effect of Poloxamer® 407 gel to inhibit the biodegradation of the lipospheres prolonging the residence of the drug in the muscle for higher absorption. Our results propose that bio-shielding in situ Poloxamer® 407 gels loaded with lipospheres is promising for the development of IM depot injection of drugs having extensive first-pass metabolism and rapid elimination.