Lipid dosage forms are the most preferred delivery system for hydrophobic drug molecules. Lipid dosage forms has many advantages of higher degree of biocompatibility and versatility and also lipid dosage form gained more importance in recent years because of their ability to improve the solubility and bioavailability of drugs with poor water solubility. Lipid formulation can be altered in various ways to provide wide range of product requirements as per the disease condition, route of administration, toxicity and efficacy. Lipid formulations are most reliable strategy for formulating pharmaceuticals, for topical, oral, pulmonary, or parenteral delivery. Due to their capability as therapeutic agents, ideally, these lipid-soluble drugs are incorporated into inert lipid carriers such as oil, surfactant dispersion, liposomes, emulsion etc. Emulsion is one of the known systems since many years. Pharmaceutical application of the emulsion is widely speeded after the microemulsion and nano emulsions appearance. Microemulsions are clear, stable and isotropic mixture of oil, surfactant and cosurfactant. Emulsions and nano emulsions are not thermodynamically stable, compared with microemulsions. The main objective of this review paper is to discuss about the effect of oil, surfactant and cosurfactant on the microemulsions.