Context: Overactive bladder (OAB) is a common problem and anticholinergic drugs are first-line therapy, but they have side effects. Objective: Development of oxybutynin chloride (OC) proniosomal gels and analyses of its efficacy for OAB treatment. Materials and methods: Phase separation coacervation was used to prepare proniosomal gels using various non-ionic surfactants, lipids, soy lecithin and isopropyl alcohol. Gels were characterized with regard to entrapment efficiency (EE), vesicle size, surface morphology (using environmental scanning electron microscopy [E-SEM]), stability, attenuated total reflectance Fourier transform infrared (ATR-FTIR) spectroscopy, in vitro skin permeation, in vivo animal studies and histopathology. Results and discussion: EE was 87-92%, vesicle size was 0.38-5.0 mm, and morphology showed some loosened pores in proniosomes after hydration. ATR-FTIR spectroscopy showed no significant shifts in peaks corresponding to OC and excipients. Most formulations exhibited 450% permeation but the cholesterol-containing formulations P3 (Span 20:Span 60 [1:1]) and P4 [Tween 20:Tween 80 (1:1)] had the highest percent cumulative permeation. P3 and P4 also showed faster recovery of cholinergic effects on salivary glands than oral formulations. P3 and P4 had pronounced therapeutic effects in reduction of urinary frequency and demonstrated improvements in bladder morphology (highly regenerative surface of the transitional epithelium). Conclusion: These results suggest that OC could be incorporated into proniosomal gels for transdermal delivery in the treatment of OAB.