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The purpose of this research was to investigate novel particulate carrier system such as solid lipid nanoparticles (SLN) for topical application of vitamin A palmitate and to study its beneficial effects on skin. Topical gels enriched with SLN of vitamin A were prepared. The solid lipid nanoparticulate dispersion was prepared using high-pressure homogenization technique and was incorporated into polymeric gels of Carbopol, Pemulen, Lutrol, and Xanthan gum for convenient application. The nanoparticulate dispersion and its gels were evaluated for various parameters such as particle size, in vitro drug release, in vitro penetration, in vivo skin hydration, and skin irritation. The solid lipid nanoparticulate dispersion showed mean particle size of 350 nm. Differential scanning calorimetry studies revealed no drugexcipient incompatibility. In vitro release profile of vitamin A palmitate from nanoparticulate dispersion and its gel showed prolonged drug release up to 24 hours, which could be owing to embedment of drug in the solid lipid core. In vitro penetration studies showed almost 2 times higher drug concentration in the skin with lipid nanoparticle-enriched gel as compared with conventional gel, thus indicating better localization of the drug in the skin. In vivo skin hydration studies in albino rats revealed increase in the thickness of the stratum corneum with improved skin hydration. The developed formulation was nonirritant to the skin with no erythema or edema and had primary irritation index of 0.00. Thus it can be concluded that SLN represents a promising particulate carrier having controlled drug release, improved skin hydration, and potential to localize the drug in the skin with no skin irritation.