The skin is a major route of drug administration. Despite the high surface area of the skin, drug delivery via the skin route is problematic due to its physiological obstacles. The formulation scientist has developed a vesicular system to enhance the skin's absorption of bioactive substances. Among numerous vesicular systems, concept of transethosomes (TEs) introduced in 2012 are being tested for drug delivery to the dermis. When transferosomes and ethosomes interact, TEs are produced. It consists of water, ethanol, phospholipids, and an edge activator. Ethanol and the edge activator increase the absorption of medication through the skin. In the presence of ethanol and an edge activator, skin permeability can increase. The advantages of TEs include increased patient compliance, bypassing first-pass metabolism, including non-toxic raw components, being a noninvasive method of drug delivery, being more stable, biocompatible, biodegradable, and administered in semisolid form. TEs can be produced through the use of hot, cold, mechanical dispersion, and conventional techniques. The morphology, shape, size, zeta potential, drug loading efficiency, vesicle yield, biophysical interactions, and stability of TEs define them. Recent studies reported successful transdermal distribution of antifungal, antiviral, anti-inflammatory, and cardiovascular bioactive while using ethosomes with significant deeper penetration in skin. The review extensively discussed various claims on TEs developed by researchers, patents, and marketed ethosomes. However, till today no patens being granted on TEs. There are still lingering difficulties related to ethanol-based TEs that require substantial research to fix.