The aim of the present research is to increase lipid solubility, metabolic stability and therapeutic efficacy of water soluble gemcitabine (GEM) via phospholipid complex (PC) formation. A novel phospholipid complex of GEM was successfully prepared and optimized. Physical interaction of GEM with phospholipid was evaluated by DSC, FT-IR, 1H NMR, 31P-NMR and P-XRD. SEM images of GEM-PC showed rough structure and TEM images of diluted aqueous dispersion of GEM-PC showed micellar structure. In silico study also revealed the significant interaction between drug and phospholipid. GEM-PC demonstrated sustained drug release pattern and high plasma stability (˜2.2 fold) in vitro as compared to GEM. Increased in vitro cytotoxicity and apoptosis were observed with GEM-PC, when incubated with human pancreas adenocarcinoma cell lines. In vivo pharmacokinetics showed the almost 2 fold increase in AUC0-∞ (area under curve) with phospholipid complex (8983.26 ng h/ml) as compared with GEM (4371.18 ng h/ml) and GEMITA (4689.29 ng h/ml). Toxicity studies signify the safety of GEM-PC over GEMITA. Pharmacodynamics studies in pancreatic tumor model further revealed higher efficacy of GEM-PC than GEMITA. These findings suggested the higher potential of phospholipid based technology for the enhancement of metabolic stability and therapeutic efficacy of GEM.