The current research work aimed to develop and evaluate the ibuprofen loaded ethosomal gel for transdermal delivery. Ibuprofen is an anti-inflammatory drug. On oral administration, it undergoes extensive hepatic metabolism. It has short biological half-life (1.8-2hr) and low bioavailability (49-70%). To overcome the side effects, it would be preferable to apply via transdermal delivery. Ibuprofen loaded ethosomes were prepared by film hydration technique using 32 factorial design and characterized for various physicochemical parameters. The optimized ethosomes was incorporated into gel using carbopol 940NF as a gel base. The developed gels were tested against rheology, ex vivo skin permeation studies, FTIR studies and stability studies. The prepared ethosomal dispersion shown particle size in the range of 140 nm to 242nm, zeta potential was found in the range of -18 to -36mV, %EE was found in the range of 44 to 84% and in vitro permeation studies were found in the range of 71 to 94% respectively. Based on rheological properties, 1%w/v concentration was optimized among the prepared gels. The ethosomal gel flux was found to be 27µg/cm2/hr which was found as better than other test products. FTIR studies revealed that there was no incompatibity between drug and excipients. Stability studies resulted that the optimum storage condition (2-8°C) doesn’t effect on degradation of physicochemical properties. It was concluded that ethosomes alters physicochemical properties of drug and thus enhances its permeation across the skin. Hence, ethosomes are considered as promising tool for anti-inflammatory therapy via transdermal delivery. Key words: Factorial design, Gel, Rheology, Permeation, Ethosomes