Aiming to enhance therapeutic efficiency of lutein, lutein loaded chitosan-sodium alginate (CS-SA) based nanocarrier composite (LNCs) were prepared and evaluated for lutein bioavailability and pharmacokinetics in diabetic rats in comparison to micellar lutein (control). Further, cytotoxicity, cellular uptake and protective activity against H2O2 induced oxidative stress in ARPE-19 cells were studied. Results revealed that LNCs displayed maximal lutein AUC in plasma, liver and eye respectively in normal (3.1, 2.7 and 5.2 folds) and diabetic (7.3, 3.4 and 2.8 folds) rats. Lutein from LNCs exhibited a higher half-life time, mean residence time and slow clearance from the plasma, indicating prolonged circulation compared to control. In ARPE-19 cells, pre-treatment with LNCs (10 µM) have significantly attenuated H2O2 induced cell death, intracellular ROS and mitochondrial membrane potential compared to control. In conclusion, LNCs improve the lutein bioavailability in conditions like diabetes, diabetic retinopathy and cataract to curtail oxidative stress in retinal cells.