Microemulsions (MEs) have gained prominence as effective drug delivery systems owing to their optical transparency, low viscosity, and thermodynamic stability. MEs, when stabilized with surfactants and/or co-surfactants, exhibit enhanced drug solubilization, prolonged shelf life, and simple preparation methods. This review examines the various types of MEs, explores different preparation techniques, and investigates characterization approaches. Plant extracts and bioactive compounds are well established for their utilization as active ingredients in the pharmaceutical and cosmetic industries. Being derived from natural sources, they serve as preferable alternatives to synthetic chemicals. Furthermore, they have demonstrated a wide range of therapeutic effects, including anti-inflammatory, antimicrobial, and antioxidant activities. However, the topical application of plant extracts and bioactive compounds has certain limitations, such as low skin absorption and stability. To overcome these challenges, the utilization of MEs enables enhanced skin absorption, thereby making them a valuable mode of administration. However, considering the significant surfactant content in MEs, this review evaluates the potential skin irritation caused by MEs containing herbal substances. Additionally, the review explores the topical application of MEs specifically for herbal substances, with an emphasis on their anti-inflammatory properties.