In order to develop a novel transdermal drug delivery system that facilitates the skin permeation of finasteride encapsulated in novel lipid-based vesicular carriers (ethosomes)finasteride ethosomes were constructed and the morphological characteristics were studied by transmission electron microscopy. The particle size, zeta potential and the entrapment capacity of ethosome were also determined. In contrast to liposomes ethosomes were of more condensed vesicular structure and they were found to be oppositely charged. Ethosomes were found to be more efficient delivery carriers with high encapsulation capacities. In vitro percutaneous permeation experiments demonstrated that the permeation of finasteride through human cadaver skin was significantly increased when ethosomes were used. The finasteride transdermal fluxes from ethosomes containing formulation (1.34 +/- 0.11 microg/cm(2)/h) were 7.4, 3.2 and 2.6 times higher than that of finasteride from aqueous solution, conventional liposomes and hydroethanolic solution respectively (P < 0.01).Furthermore, ethosomes produced a significant (P < 0.01) finasteride accumulation in the skin, especially in deeper layers, for instance in dermis it reached to 18.2 +/- 1.8 microg/cm(2). In contrast, the accumulation of finasteride in the dermis was only 2.8 +/- 1.3 microg/cm(2) with liposome formulation. The study demonstrated that ethosomes are promising vesicular carriers for enhancing percutaneous absorption of finasteride.