This study aims to clarify the process of oral drug absorption from jelly formulations. Agar and pectin-based jellies containing drugs with different membrane permeability (high: antipyrine [ANT], medium: metoprolol [MET], low: atenolol [ATE]) were prepared and tested for in vitro drug release and in vivo drug absorption in rats. All drugs showed similar release profiles in vitro from both jelly formulations, except for the faster release from pectin jelly at neutral pH. In contrast, in vivo absorption of ATE but not of ANT from jelly formulations was significantly lower than from solution. Absorption of ATE and MET was low from agar jelly after oral administration, whereas additional water intake significantly increased the absorption. The process of drug absorption was described by the compartmental model consisting of jelly, intestinal fluid, and blood compartments. Drugs in the jelly diffuse into the intestinal fluid and then permeate the intestinal membrane. By considering the rate-limiting process, membrane permeability-dependent drug absorption from agar jelly and the effects of water intake were identified. In conclusion, jelly formulations may potentially decrease and delay drug oral absorption, especially of poorly permeable drugs. Intestinal fluid volume is one of the important factors to control the drug absorption.