Microemulsions have been regarded as more effective topical vehicle than its conventional skin applications like cream and gel. Being transparent and thermodynamically stabile system, microemulsions are formed spontaneously with relative ease of manufacture. Such system has better scale up potential demonstrating their industrial feasibility as well. These nano-structured vehicle exhibited better solubilisation of drug, higher skin permeation of drug in comparison to conventional formulations when applied on skin. Enhanced drug solubilization, increased flux across skin, decrease in diffusion co-efficients are major attributes of microemulsion system owing to internal phase existed in nanosize droplet, ultralow interfacial tension with enhanced surface free energy. Present review focuses on different characterization methods available to establish phase behavior, type of microemulsion, microstructure details, rheological properties etc. Effect of formulation components of microemulsion, trends in selection of new exicipients constituting oil phase, surfactant and cosurfactant has been highlighted herein and future orientations. Microemulsion based system find significant improvement in topical delivery of antifungal, antiviral, anti-inflammatory, antioxidant, local anesthetics, etc.