Atovaquone in combination with proguanil hydrochloride, marketed as Malarone® tablets by GlaxoSmithKline (GSK), is prescribed for the treatment of malaria. High dose and poor bioavailability are the main hurdles associated with atovaquone oral therapy. The present study reports development of atovaquone nanoparticles, using in house designed and fabricated electrospraying equipment, and the assessment of bioavailability and therapeutic efficacy of the nanoparticles after oral administration. Solid nanoparticles of atovaquone were successfully produced by electrospraying and were characterized for particle size and flow properties. Differential Scanning Calorimetry, X-ray Diffraction, Fourier Transform Infrared Spectroscopy studies were also carried out. Atovaquone nanoparticles along with proguanil hydrochloride and a suitable wetting agent were filled in size 2 hard gelatin capsules. The formulation was compared with Malarone® tablets (GSK) and Mepron® suspension (GSK) in terms of in vitro release profile and in vivo pharmacokinetic studies. It showed 2.9-fold and 1.8-fold improved bioavailability in rats compared to Malarone® tablets and Mepron® suspension respectively. Therapeutic efficacy of the formulation was determined using modified Peter's 4-day suppressive tests and clinical simulation studies using Plasmodium berghei ANKA infected Swiss mice and compared to Malarone®. The developed formulation showed a 128-fold dose reduction in the modified Peter's 4-day suppressive tests and 32-fold dose reduction in clinical simulation studies. Given that only one capsule a day of developed formulation is required to be administered orally compared to 4 Malarone® tablets once a day and that too at a significantly reduced dose, this nanoparticle formulation will definitely reduce the side-effects of the treatment and is also likely to increase patient compliance.