Niosome is a novel, vesicular drug delivery system meant to deliver drug in a controlled manner to increase its bioavailability, therapeutic efficacy and duration of action thereby minimizing side-effects. Niosomes are structurally similar to liposomes. However, the bilayer of niosomes is made of Non-ionic surfactants rather than phospholipids. Niosomes offer several advantages over conventional drug therapy, but niosomes also have some serious challenges. This paper overviews the types of niosomes, its formulation, effect of individual components on niosomes, various methods of preparation, evaluation and its applications. Finally, patents on niosomal formulations are also discussed.