Ethosomes, which are liposomes like structures, mainly composed primarily of ethanol, have attracted considerable attention due to their potential to enhance the drug permeation via skin. The article discusses the formulation and preparation methods of ethosomes, offering insights into the various factors that influence their size, shape, and stability. Moreover, it explores the techniques used to assess the physicochemical properties of ethosomes and their impact on drug delivery effectiveness. The article also elucidates the mechanism by which ethosomes enhance skin permeation, emphasising their ability to modify the lipid structure and fluidity of the stratum corneum. Additionally, the review investigates the applications of ethosomes in diverse drug delivery scenarios, including the delivery of small molecules, peptides, and phytoconstituents. It highlights the potential of ethosomes to improve drug bioavailability, extend drug release, and achieve targeted delivery to specific skin layers or underlying tissues.