Capsaicin is responsible for the chili’s pungent flavour and is used to suppress different types of cancer cells. However, capsaicin causes gastrointestinal irritation and shows poor aqueous solubility. To increase the aqueous solubility and decrease the gastrointestinal irritation, capsaicin was complexed with phospholipid. A phospholipid complex was prepared and characterized through x-ray diffraction, differential scanning calorimetry, and Fourier-transform infrared spectroscopy. The prepared phospholipid complexes were studied for solubility, in vitro drug release and in vitro cytotoxicity. Molecular interaction between capsaicin and phospholipid was identified through Fourier-transform infrared spectroscopy, which confirmed the formation of phospholipid complex. X-ray diffractometer and differential scanning calorimetry results indicated reduced crystallinity of capsaicin in the complex. The solubility of the capsaicin was found to be enhanced 1.7 and 2.6 fold in 1:1 and 1:2 complex in comparison to free capsaicin. In dissolution studies, the phospholipid complex exhibited a higher rate of drug release compared to the free drug. Phospholipid complex showed more cytotoxic potential on MCF-7 and MDA-MB-231 human breast cancer cells compared to free capsaicin in an MTT assay that measures metabolic activity. The present study demonstrated that a phospholipid complex of capsaicin overcomes the problems related to the poor aqueous solubility and could be used as effective delivery carrier for cancer therapy.