Zingeber officinale is a commonly used plant which has been shown to possess anti-inflammatory activity. The active compounds present in ginger are gingerols, shagaols and paradol. The aim of this study was formulation of topical microemulsion system to enhance the solubility and stability of ginger extract, as it is unstable in the presence of light, air, heat and long term storage, and to evaluate its anti-inflammatory activity. The solubility of ginger extract in different oils, surfactants, and co-surfactants was determined in order to find the optimal components for microemulsion. IPM was selected as oil phase, tween 80 and PEG 400 were selected as surfactant and co-surfactant respectively based on highest solubility values. Pseudo-ternary phase diagram was constructed in order to find out the microemulsion region. The prepared microemulsions were evaluated for pH, viscosity, conductivity, refractive index, globular size, zeta potential, polydispersity index, ginger extract content. The formulation F1 showed best physicochemical properties with smallest globular size. It also showed significant (p<0.05) anti-inflammatory effect as compared to reference piroxicam drug solution. Based on the results, it is concluded that ginger extract can be used to develop stable microemulsion system and promising anti-inflammatory activity.