The present study was performed to determine the therapeutic effects of tioconazole (Tz)-loaded novel transferosome carriers (TFs) for the treatment of atopic dermatitis (AD). Method: Tioconazole transferosomes suspension (TTFs) was formulated and optimized using a 32 factorial design. After that, the optimized batch of TTFs loaded into Carbopol 934 and sodium CMC was prepared with hydrogel and noted as TTFsH. Subsequently, it was evaluated for pH, spread ability, drug content, in vitro drug release, viscosity, in vivo scratching and erythema score, skin irritation, and histopathology study. Result: The optimized batch of TTFs (B4) showed the values of vesicle size, flux, and entrapment efficiency to be 171.40 ± 9.03 nm, 48.23 ± 0.42, and 93.89 ± 2.41, respectively. All batches of TTFsH showed sustained drug release for up to 24 h. The F2 optimized batch released Tz in an amount of 94.23 ± 0.98% with a flux of 47.23 ± 0.823 and followed the Higuchi kinetic model. The in vivo studies provided evidence that the F2 batch of TTFsH was able to treat atopic dermatitis (AD) by reducing the erythema and the scratching score compared to that of the marketed formulation (Candiderm cream, Glenmark). The histopathology study supported the result of the erythema and scratching score study with intact skin structure. It showed that a formulated low dose of TTFsH was safe and biocompatible to both the dermis and the epidermis layer of skin. Conclusion: Thus, a low dose of F2-TTFsH is a promising tool that effectively targeted the skin for the topical delivery of Tz to treat atopic dermatitis symptoms.