Topical curcumin shows poor local availability because of its low aqueous solubility and inadequate tissue absorption. Curcumin nanocrystals were prepared by sonoprecipitation followed by lyophilization to improve surface area and solubility. The formulation was optimized by the Design of Experiment (DoE) approach. The nanocrystals were characterized for particle size, zeta potential, polydispersity index, scanning electron microscopy (SEM), powder x-ray diffraction (PXRD), practical yield and in vitro drug release studies. The nanocrystal-incorporated gel was evaluated for drug content, ex vivo permeation, in vivo skin irritation, and in vivo wound healing activity. Time of sonication and amplitude influenced the optimization of curcumin nanocrystals, but the effect of stabilizer concentrations was not significant beyond 0.5% w/w. SEM images of curcumin nanocrystals revealed irregular and plate-shaped particles with rough surfaces. PXRD patterns of curcumin nanocrystals showed low crystallinity compared to unprocessed curcumin powder. An in vitro drug release study demonstrated significant improvement in the percentage cumulative drug release in the form of nanocrystals compared to the unprocessed curcumin, and the release profile exhibited first-order kinetics. Curcumin nanocrystal gel showed 93.86% drug content and was free of skin irritation potential. Excision wound healing activity in albino rats showed that the curcumin nanocrystal gel exhibited significantly faster wound contraction than curcumin powder-incorporated gel.