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Capsaicin has multiple pharmacological activities including antioxidant, anticancer, and anti-inflammatory activities. However, its clinical application is limited due to its poor aqueous solubility, gastric irritation, and low oral bioavailability. This research was aimed at preparing sustained-release matrix pellets of capsaicin to enhance its oral bioavailability. The pellets comprised of a core of solid-dispersed capsaicin mixed with microcrystalline cellulose (MCC) and hydroxypropyl cellulose (HPMC) and subsequently coating with ethyl cellulose (EC) were obtained by using the technology of extrusion/spheronization. The physicochemical properties of the pellets were evaluated through scanning electron microscopy (SEM), differential scanning calorimetry (DSC), and X-ray diffractometry (XRD). Besides, the in vitro release, in vivo absorption, and in vitro–in vivo correlation were also assessed. More importantly, the relative bioavailability of the sustained-release matrix pellets was studied in fasted rabbits after oral administration using free capsaicin and solid dispersion as references. The oral bioavailability of the matrix pellets and sustained-release matrix pellets of capsaicin was improved approximately 1.98-fold and 5.34-fold, respectively, compared with the free capsaicin. A good level A IVIVC (in vitro–in vivo correlation) was established between the in vitro dissolution and the in vivo absorption of sustained-release matrix pellets. All the results affirmed the remarkable improvement in the oral bioavailability of capsaicin owing to the successful preparation of its sustained-release matrix pellets.