A rehydration composition and oral delivery system is provided that allows for enhanced functional ingredient delivery when ingested orally as a water based solution. The rehydration composition comprises a liposomed electrolyte composition comprised of sodium, potassium, citrate, and / or bicarbonate. The rehydration composition, which is concentrated or dried, becomes an oral rehydration solution (ORS) when mixed with water for oral consumption. The rehydration composition, may optionally contain carbohydrates, or functional ingredients, liposomed or not, such as vaccines, drugs, amino acids, mineral salts, vitamins, nutraceuticals, probiotics, prebiotics, flavors, or nutritive or non-nutritive sweeteners. These oral rehydration compositions may then be concentrated to greater than 78% solids or dried to less than 5% moisture. The composition may also be concentrated to less than 78% solids and packaged aseptically or stabilized with preservative agents.