The purpose of this study was to enhance the biopharmaceutical performance of Dexibuprofen (DXI) using transfersomal gel (DXI-TG) as drug delivery system. DXI loaded transfersomes (DXI-T) were prepared via thin film technique, characterized for particle size, polydispersity index, zeta potential, particle morphology and entrapment efficiency. The DXI-T was further incorporated into 2 % (w/v) chitosan gel to get the final dosage form DXI-TG, which was characterized for homogeneity, pH, spread-ability and rheological properties. In vitro release, ex vivo permeation and in vivo studies were also conducted along with stability study of the optimized formulation. DXI-T showed excellent vesicle properties including, size distribution (235.1 ± 4.66 nm), poly dispersity index (0.184 ± 0.001), zeta potential (−10.5 ± 0.23 mV) and entrapment efficiency (82.9 ± 1.07 %). TEM analysis exhibited spherical morphology and uniformly distributed nanoparticles, whereas FTIR showed no bond anomalies. DXI-TG showed suitable gel properties with a viscosity of 11310 ± 20 cP, pH 5.2 ± 0.3, good homogeneity, non-Newtonian flow behavior, good spread-ability (298 ± 7.63 %) and high drug content (97.01 ± 3.1 %). in vitro release studies demonstrated that DXI-TG has significantly controlled the release of DXI when compared with DXI-T, DXI-G and DXI-Suspension at pH 5.5 and 7.4. Similarly, ex vivo permeation analysis showed meaningfully increased permeation of DXI-T followed by DXI-TG when compared with test formulations. Like normal control group, skin irritation studies showed no erythema and edema in DXI-TG treated group. Additionally, DXI-TG demonstrated a significantly enhanced bioavailability (5-fold) when compared with DXI-Suspension and DXI-G. Furthermore, DXI-TG showed significantly enhanced therapeutic effect against acute arthritis model when compared with DXI-Suspension and DXI-G. Besides, no signs of evident toxicity on major body organs was observed in DXI-TG treated animal group. Also, the DXI-TG was found stable for a period of 6 months. It can be concluded that transfersomal gel may be a suitable carrier for DXI with enhanced bioavailability, improved therapeutic efficacy and no evident toxicity as exhibited in this study.