IMPORTANCE Attempts to use topical cyclosporine in treatment of psoriasis have failed because of unfavorable physicochemical properties and inappropriate formulation design of the conventional dosage forms. OBJECTIVE To evaluate the efficacy of topical cyclosporine using liposomal nanocarriers (lipogel) in limited chronic plaque psoriasis. DESIGN, SETTING, AND, PARTICIPANTS A single-center randomized clinical trial was conducted using a 3-arm parallel group, double-blind, vehicle and active comparator design and included 38 patients with chronic plaque psoriasis measuring less than or equal to 100 cm 2 performed in a tertiary care hospital. INTERVENTIONS In the first arm, a total of 24 patients were randomized to receive either cyclosporine lipogel, 2.0% weight by weight (w/w), or placebo lipogel. In the second arm, 7 patients were randomized to receive cyclosporine lipogel, 2.0%, or conventional cyclosporine cream, 2.0% w/w. The third arm comprised 7 patients randomized with cyclosporine lipogel, 2.0% or standard clobetasol propionate cream, 0.05% w/w. Patients were examined twice weekly for 14 weeks, or until total lesional clearance was observed, whichever was earlier. MAIN OUTCOMES AND MEASURES The primary outcome measure was the dermatological sum score (DSS) assessing erythema, scaling, and plaque elevation on a 4-point scale (0, absent; 1, minimal; 2, moderate; 3, severe). RESULTS In 38 patients (23 men and 15 women with a mean [SD] age range from 35 [8] to 40 [13] years), a 19% decrease in DSS score from a mean (SD) of 8.45 (0.67) to 6.82 (0.77) compared with baseline was observed after 2 weeks of treatment with cyclosporine lipogel, 2.0% w/w (P < .001; 95% CI, 13.77-24.51) in 59% of psoriasis lesional sites. At the end of the eighth week, a significant reduction (approximately 83%) in DSS was seen in all sites treated with cyclosporine lipogel, (P < .001; 95% CI, 77.48-88.22). At the end of the study period, complete clearance (ie, DSS = 0) was observed in 16 (41%) psoriasis lesional sites treated with cyclosporine lipogel, 85.7% of sites treated with clobetasol propionate cream, and none of the sites treated with conventional cyclosporine cream or placebo gel. CONCLUSIONS AND RELEVANCE Topical liposomal formulation of cyclosporine, 2.0% w/w, is effective in treatment of limited chronic plaque psoriasis with a satisfactory safety profile. Future clinical trials should assess liposomal cyclosporine in larger study populations.