Lisofylline (LSF) is an anti-inflammatory molecule with high aqueous solubility and rapid metabolic interconversion to its parent drug, pentoxifylline (PTX) resulting in very poor pharmacokinetic (PK) parameters, necessitating high dose and dosing frequency. In the present study, we resolved the physicochemical and pharmacokinetic limitations associated with LSF and designed its oral dosage form as a tablet for effective treatment in type 1 diabetes (T1D). Self-assembling polymeric micelles of LSF (lisofylline-linoleic acid polymeric micelles (LSF-LA PLM)) were optimized for scale-up (6 g batch size) and lyophilized followed by compression into tablets. Powder blend and tablets were evaluated as per USP. LSF-LA PLM tablet so formed was evaluated for in vitro release in simulated biological fluids (with enzymes) and for cell viability in MIN-6 cells. LSF-LA PLM in tablet formulation was further evaluated for intestinal permeability (in situ) along with LSF and LSF-LA self-assembled micelles (SM) as controls in a rat model using single-pass intestinal perfusion (SPIP) study. SPIP studies revealed 1.8-fold higher oral absorption of LSF-LA from LSF-LA PLM as compared to LSF-LA SM and ~5.9-fold higher than LSF (alone) solution. Pharmacokinetic studies of LSF-LA PLM tablet showed greater C than LSF, LSF-LA, and LSF-LA PLM. Designed facile LSF-LA PLM tablet dosage form has potential for an immediate decrease in the postprandial glucose levels in patients of T1D.