Topical therapy for skin cancer is considered ineffective, due to insufficient penetration of the anticancer drug into the tumor located in the deep layers of the skin. The aim of this work was to investigate a new system, Tumorep DS, tailored to deliver the anti-cancer actives into the tumor cells in the deep skin and to induce cell differentiation. Tumorep DS containing 5-fluorouracil (5-FU) anticancer drug and a sulfoxide derivative, as a differentiation agent, was characterized and tested for storage stability. The system was tested in cell lines, in vitro and in animal models. Experiments were carried out on five cell types: three tumorigenic (TE.354.T, ES-2, and Mel624), one precancerous (HaCaT), and a primary keratinocyte (human normal keratinocytes) cell culture. Treatment of keratinocytes with Tumorep DS resulted in reduction in the percent of keratin 14-positive cells, suggesting its ability to induce cell differentiation. Skin penetration was assessed in vitro in Franz diffusion cells and in vivo. The antitumor effect of the new system evaluated in two skin cancer animal models showed a significant repression of tumor development, which was significantly better statistically than a 5-FU commercial product. Tumorep DS was found to be safe to the skin when tested in vitro in the EpiDerm™ skin irritation test and in animals.