The present study deals with the development of transferosomal gel containing insulin by reverse phase evaporation method for painless insulin delivery for use in the treatment of insulin dependent diabetes mellitus. The effect of independent process variables like ratio of lipids (soya lecithin:cholesterol), ratio of lipids and surfactants, and ratio of surfactants (Tween 80:sodium deoxycholate) on the in vitro permeation flux (μg/cm(2)/h) of formulated transferosomal gels containing insulin through porcine ear skin was optimized using 2(3) factorial design. The optimal permeation flux was achieved as 13.50 ± 0.22 μg/cm(2)/h with drug entrapment efficiency of 56.55 ± 0.37% and average vesicle diameter range, 625-815 nm. The in vitro insulin permeation through porcine ear skin from these transferosomal gel followed zero-order kinetics (R (2) = 0.9232-0.9989) over a period of 24 h with case-II transport mechanism. The in vitro skin permeation of insulin from optimized transferosomal gel by iontophoretic influence (with 0.5 mA/cm(2) current supply) also provided further enhancement of permeation flux to 17.60 ± 0.03 μg/cm(2)/h. The in vivo study of optimized transferosomal gel in alloxan-induced diabetic rat has demonstrated prolonged hypoglycemic effect in diabetic rats over 24 h after transdermal administration.