Microsponges are uniform, spherical, porous polymeric microspheres having myriad interconnected voids of particle size range 5-300 μm. These microsponges have the capacity to entrap a wide range of active ingredients such as emollients, fragrances, essential oils, sunscreens and anti-infective, etc. and then release them onto the skin over a time in response to a trigger. Microsponge Delivery System (MDS) can be used to resolve the problem associated with these conventional approaches. The drug entrapped microsponges can be incorporated into a formulated product, such as a gel, cream, liquid or powder. Microsponge is as tiny as a particle of talcum powder. Although they are microscopic in size, these systems are too large to pass through the stratum corneum thus preventing excessive accumulation of drugs within the epidermis and dermis, and hence systemic entry of the drugs. They increase the rate of solubilization of poorly water soluble drugs by entrapping such drugs in pores of the microsponges. In this study, Flutrimazole and Oxiconazole nitrate microsponge were prepared by quasi-emulsion solvent diffusion method. The microsponges thus prepared, were evaluated for production yield, loading efficiency, particle size analysis, SEM, IR, DSC, PXRD, characterization of pore structure, in-vitro release study of microsponges, and stability. Then, gels loaded with microsponge and plain drug were formulated and evaluated for rheology, diffusion, skin irritation and antifungal activity. Antifungal activity of Flutrimazole and Oxiconazole nitrate containing microspongic gels were compared with marketed formulations. The microsponges showed good production yield, loading efficiency and particle size. All characteristic peaks of the drugs were concordant with IR spectra of pure drugs. PXRD and DSC studies revealed amorphization of drugs. SEM images showed that styrene microsponges prepared by suspension polymerization were finely spherical and uniform, while Eudragit microsponges prepared by quasi-emulsion solvent diffusion method were comparatively less spherical. According to intrusion and extrusion curves, majority of the pores present in Eudragit microsponges were spherical type, whereas the pores of styrene microsponges were mainly cylindrical-hole type. BET multipoint adsorption isotherm studies revealed that the percent of porosity of styrene microsponges is comparatively higher than Eudragit based microsponges. During the storage of drug-entrapped microsponges at 40±2°C and 75±5% RH for 6 months, surface morphology and release of drug showed no notable changes. Viscosity determination of gel showed that gels loaded with microsponge are more viscous than gel loaded with plain drug. The controlled drug release was observed with all the microspongic gels. Antifungal activity of gels containing microsponge entrapped Flutrimazole and Oxiconazole nitrate showed that antifungal activity of drugs was retained even after entrapment in microsponges and it was higher as compared with the gel containing free drug and marketed formulation. Gels containing drugs entrapped in microsponges.