Ketoconazole Nanosponges were prepared by using Hyper cross linked β-cyclodextrin method by using different concentration of cross-linker. Diphenyl carbonate was used as the cross linking polymer. Nanosponge formulations were prepared by using β-CD: cross linker ratios of 1:15, 1:10, 1:5 and 1:3.Thepreparednanosponges were evaluated for percentage yield, incorporation efficiency, particle size, drug polymer compatibility, scanning electron microscopy andin-vitrodrugrelease.SEM studies confirmed their porous structure with number of nano channels. The FTIR spectra showed stable character of Ketoconazole in mixture of polymers and revealed the absence of drug polymer interactions. DSC study revealed that drug was involved in complexation with nanosponges. The average particle size of Ketoconazole nanoparticles was found to be in the range of 78.81± 0.20 nm to336.02 ± 0.124nm.The drug release from nanosponges was found to extended upto 8hr. 82 to 92%.The nano sponges were formulated into gel using Carbopol 940Batches G1 to G4 were prepared by incorporating nanosponges equivalent to 6%w/w of ketoconazole in different polymer concentrations respectively and evaluated for Percent drug content, Viscosity study, Spreadability study, In vitro diffusion studies. Nanosponge gel G1 showed the optimum pH, viscosity, Spread ability and In vitro release. Drug diffusion from the nanosponge loaded gel formulations was show sustained rate. A sustained release topical drug delivery of Ketoconazole developed as a nanosponge loaded gel offers solubilizing matrix for the drug, served as a local depot for sustained drug release and provided a rate limiting matrix barrier for modulation of drug release.