The objective of the current study was to develop and evaluate diacerein-loaded transferosomal gel to augment the permeation of diacerein into the deeper skin layer and finally to the affected area to treat arthritis. Preliminary studies included the process variable optimization (RPM) and selection of surfactant. The circumscribed central composite design was included to explore the reactions of the amount of phospholipon 90H, cholesterol, and span 60 on dependent variables like % entrapment competency, vesicle size, and release of drugs. The diacerein-loaded transferosome were assembled by reverse-phase evaporation method and evaluated for zeta potential and particle size, vesicle morphology, % entrapment competency, and in-vitro drug release study. The optimized batch of transferosomal suspension was incorporated in gel using carbopol 934P and the transferosomal gel was evaluated for various physicochemical properties, drug release, Ex-vivo permeation study, skin irritation, pharmacodynamic activity, and stability. Span 60 was selected as a surfactant for the preparation of transferosomal suspension using optimized process variables. The statistical model indicated that as the concentration of lipid increased then entrapment efficiency also improved. However, as the concentration of surfactant increased then drug release from the transferosomal gel also increased. The TEM of transferosomal suspension was elucidated sphericity. The optimized transferosomal suspension was incorporated into the gel. The in-vitro release of diacerein from optimized transferosomal gel followed Higuchi kinetic model (R2 =0.9815). The developed formulation was stable, non-irritating, and showed a maximum amount of % swelling inhibition using carrageenan inducing hind rat paw oedema at a different time interval.