Abstract. Ketoconazole (KCZ) nanoemulgel containing permeation enhancer was formulated as a vehicle for transungual drug delivery, and its efficacy to inhibit the growth of onychomycotic dermatophytes was investigated in vitro. Different components of oil-in-water nanoemulsions were moderately agitated by classical titration method and passed through a high-pressure homogenizer to formulate various nanoemulsions, which were further identified by constructing pseudo-ternary phase diagrams. Stressstability testing was carried out for the nanoemulsions, and those that passed these tests were characterized for mean droplet size, zeta potential, morphology, pH, refractive index, viscosity and transmittance. Mean droplet size and zeta potential of the optimized nanoemulsion (NE3) were found to be 77.52 ± 0.92 nm (polydispersity index (PDI) = 0.128 ± 0.035) and −5.44 ± 0.67 mV, respectively. Optimized nanoemulsion was converted into nanoemulgel (NEG 1 ) with 1% (w/w) of gelling agent (Carbopol® Ultrez 21) and 1%-2% (v/v) thioglycolic acid as permeation enhancer, and evaluated for pH, viscosity, spreadability, extrudability, tensile strength and bio-adhesion measurement. In vitro cumulative drug released at the end of 24 h from NE3, NEG 1 and drug suspension were found to be 98.87 ± 1.29, 84.42 ± 2.78% and 54.86 ± 2.19%, respectively. Ex vivo transungual permeation values for KCZ through goat hooves from NE3, NEG 1 and drug suspension were found to be 62.49 ± 2.98, 77.54 ± 2.88% and 38.54 ± 2.54%, respectively, in 24 h. The antifungal effect of NEG 1 on Trichophyton rubrum and Candida albicans showed a significant (p < 0.05) zone of inhibition as compared to drug solution. Skin irritation and histopathology studies on rat skin showed the safe topical use and enhanced permeation of formulated nanoemulgel.