Lavender essential oil (LEO) is applied topically for its soothing properties, serving not only as an antiseptic in wound care but also as an insect repellent. This study investigates the impact of carrier systems on LEO encapsulation, stability, and release kinetics for potential skincare applications. The LEO carrier impact on skin hydration and barrier function was also evaluated. Conventional emulsions (CEs) and nanoemulsions (NEs) with (CELs and NELs, respectively) and without LEO incorporation were analyzed for physicochemical properties, stability, and release mechanisms. The droplet size distribution and ζ-potential remained consistent in both CE and CEL, showing the minimal influence of LEO on those parameters. NE and NEL exhibited enhanced stability and higher LEO retention compared to CE and CEL (37.38 mg/mL ± 0.48 mg/mL and 50.96 mg/mL ± 2.00 mg/mL, respectively, p < 0.05), suggesting NE as a superior carrier system for LEO delivery. NEL retained LEO over 60 days at 4 °C without a significant reduction while CEL showed a notable reduction of 94.93% ± 0.08%. Release kinetics analysis showed zero-order release kinetics of LEO from both CEL and NEL (R2: 0.973 and 0.952, respectively), revealing a diffusion-based mechanism, particularly evident in NE formulations, supporting the controlled and sustained release of LEO constituents. NEL also promoted quicker skin barrier repair and enhanced skin hydration, sustaining effects for up to 120 min post application, surpassing CEL’s performance. These findings contribute to understanding the carrier system effects on LEO delivery and underscore NE as a promising vehicle for skincare applications. Further research should explore underlying mechanisms and conduct long-term safety and efficacy studies to fully exploit the therapeutic potential of NE in dermatological applications.