Glyceryl monooleate (GMO) is a polar amphiphilic lipid, which forms different sequential lyotropic liquid crystals upon hydration. GMO has been utilized for various delivery systems and routes of administrations. Owing to sticky and waxy nature of GMO, preparation of oral solid dosage form utilizing GMO is still a challenge for pharmaceutical researchers. Therefore, the objective of the present work was to fabricate dry powder precursors using GMO, which upon hydration in situ forms cubic phase and can be wisely used for fabrication of oral solid dosage forms. In addition to this, dry powder precursor was evaluated for drug loading, in vitro release behavior and in vivo performance of model drug diclofenac sodium (DiNa). The dry powder precursor was obtained by spray-drying GMO with DiNa using magnesium trisilicate (MTS) as adsorbent. The percent drug entrapment of various batches of powder precursor was in the range of 84-93% indicating high content uniformity. SEM and image analysis showed that as the amount of MTS in powder precursor was increased, the particle size decreased. Furthermore, the viscosity of powder precursor was function of amount of MTS. The rate of water uptake of powder precursor was higher due to uniform layer of GMO on the MTS surface, which led to faster transformation of lamellar phase into cubic phase. The polarizing light microscopy confirmed that cubic phase was formed upon hydration of powder precursor. The drug released from powder precursor was initially governed by the cubic phase formed and in later stage it depends upon dynamic swelling behavior of hexagonally packed cylindrical aggregates. The drug loaded powder precursor was found to have more effective and prolonged anti-inflammatory and analgesic activity as compared to pure drug. Thus the dry powder precursor of cubic phase was prepared in which drug release was entirely governed by the mesophases formed.