Objective: To enhance the pharmaceutical potential and oral bioavailability of quercetin contents of Allium cepa peel extract by novel nanosuspension technology. Methods: Nanoprecipitation approach was successfully used for the formulation of nanosuspension. To obtain pharmaceutical-grade nanosuspension with minimum particle size and polydispersity index, sodium lauryl sulphate was selected as a stabilizer. Important formulation parameters were statistically optimized by the response surface methodology approach. The optimized nanosuspension was subjected to stability and in vitro dissolution testing and characterized by scanning electron microscopy, atomic force microscopy, Fourier transform infrared spectroscopy, and zeta sizer. To evaluate the preeminence of nanosuspension over coarse suspension, comparative bioavailability studies were carried out in male albino rats. The pharmaceutical potential of developed nanosuspension was evaluated by antioxidant, antimicrobial, and toxicity studies. Results: The optimized nanosuspension showed an average particle size of 275.5 nm with a polydispersity index and zeta potential value of 0.415 and -48.8 mV, respectively. Atomic force microscopy revealed that the average particle size of nanosuspension was below 100 nm. The formulated nanosuspension showed better stability under refrigerated conditions. Nanosuspension showed an improved dissolution rate and a 2.14-fold greater plasma concentration of quercetin than coarse suspension. Moreover, the formulated nanosuspension exhibited enhanced antioxidant and antimicrobial potential and was non-toxic. Conclusions: Optimization of nanosuspension effectively improves the pharmaceutical potential and oral bioavailability of Allium cepa extract.