Skin, the largest organ of the body serves as a potential route of drug delivery for local and systemic effects. However, the outermost layer of skin, the stratum corneum (SC) acts as a tough barrier that prevents penetration of hydrophilic and high molecular weight drugs. Ethosomes are a novel phospholipid vesicular carrier containing high ethanol concentrations and offer improved skin permeability and efficient bioavailability due to their structure and composition. This article gives a review of ethosomes including their compositions, types, mechanism of drug delivery, stability, and safety behaviour. This article also provides a detailed overview of drug delivery applications of ethosomes in various diseases.