Solid lipid nanoparticles (SLN) are colloidal carrier systems providing controlled release profiles for many substances. These are interesting nanoparticulate delivery systems produced from solid lipids. Erythromycin-loaded SLN were prepared using glyceryl behenate as solid lipid by microemulsion technique and evaluated for particle size, zeta potential as well as entrapment efficiency of this lipophilic drug. The formulation was optimized using taguchi design L9 orthogonal array. The formulated SLNs were found to be relatively uniform in size (355.29 nm) with a negative zeta potential (−15.90 mV). The average drug entrapment efficiency and loading were 51.65%. The ultimate objective of the present study was to formulate erythromycin loaded solid lipid nanoparticulate (ESLN) gel and compare it with conventional gel of erythromycin with respect to ex-vivo release and primary skin irritation studies. ESLN gel produced significantly higher deposition of erythromycin in skin than conventional gel. Release mechanism was found to be a coupling of diffusion and erosion. The obtained results for primary skin irritation studies displayed no erythema or edema on intact rat skin. The SLN based gel described in this study elicited prolonged activity of upto 24 h.