The study aimed to prepare and optimize luteolin (LUT)-loaded transdermal elastic liposomes (LEL1-LEL12), followed by in vitro and ex vivo evaluations of their ability to control breast cancer. Various surfactants (Span 60, Span 80, and Brij 35), and phosphatidyl choline (PC) as a lipid, were used to tailor various formulation as dictated by “Design Expert® software (DOE). These were characterized for size, polydispersity index (PDI), and zeta potential. The optimized formulation (OLEL1) was selected for comparative investigations (in vitro and ex vivo) against lipo (conventional liposomes) and drug suspension (DS). Moreover, the in vitro anticancer activity of OLEL1 was compared against a control using MCF-7 cell lines. Preliminary selection of the suitable PC: surfactant ratio for formulations F1–F9 showed relative advantages of Span 80. DOE suggested two block factorial designs with four center points to identify the design space and significant factors. OLEL1 was the most robust with high functional desirability (0.95), minimum size (202 nm), relatively high drug release, increased drug entrapment (92%), and improved permeation rate (~3270 µg/cm2) as compared with liposomes (~1536 µg/cm2) over 24 h. OLEL1 exhibited a 6.2- to 2.9-fold increase in permeation rate as compared with DS (drug solution). The permeation flux values of OLEL1, and lipo were found to be 136.3, 64 and 24.3 µg/h/cm2, respectively. The drug disposition values were 670 µg, 473 µg and 148 µg, for OLEL1, lipo and DS, respectively. Thus, ex vivo parameters were significantly better for OLEL1 compared with lipo and DS which is attributed to the flexibility and deformability of the optimized formulation. Furthermore, OLEL1 was evaluated for anticancer activity and showed maximized inhibition as compared with DS. Thus, elastic liposomes may be a promising approach for improved transdermal delivery of luteolin, as well as enhancing its therapeutic efficacy in controlling breast cancer.