Marketed topical gels of the antifungal drug naftifine hydrochloride contain 50% alcohol as cosolvent. Repeated exposure to alcohol could be detrimental to skin. The aim of this study is to develop an alcohol-free niosome gel containing 1% naftifine hydrochloride. Niosomes were prepared and formulation variables were optimized to achieve maximum entrapment coupled with stability. Maximum drug entrapment and niosome stability entailed imparting a negative charge to the vesicles where entrapment efficiency reached 50%. Niosomes were incorporated into a hydroxyethylcellulose gel. The final gel contained a total drug concentration of 1% (wt/wt) half of which was entrapped in the niosomes. The results suggest the potential usefulness of the niosome gel.