The present investigation aims to evaluate the transdermal potential of elastic liposomes (Ethosomes) loaded with 5 Fluorouracil (5 FU), an effective antineoplastic agent with poor skin permeation. 5 FU ethosomes were prepared, optimized and characterized for vesicular shape and surface morphology, vesicular size and size distribution, stability, entrapment efficiency, in vitro skin permeation test, skin irritancy test. Transmission electron microscopy, Dynamic light scattering shows spherical vesicles and nanometric size range (140.6 nm). Percent entrapment efficiency of the optimized formulation (Et_63/20/40) was found to be 76.6 + 0.52%.Fourier Transformed–Infra Red (FT–IR) data generated to assessed the fluidity of skin after the application of formulation. Further, a better skin tolerability suggested that ethosomes may offer a suitable approach for transdermal drug delivery of 5 FU. These results can be considered as a step forward for the transdermal drug delivery system of certain problematic molecules like 5 FU for various types of skin cancers like Actinic Keratosis (AK), Squamous Cell Carcinoma (SCC), and Basal Cell Carcinoma (BCC) etc.