Isotretinoin was formulated in novel micro emulsion based gel formulation with the aim of improving its solubility, skin tolerability, therapeutic efficacy, skin-targeting efficiency and patient compliance. Micro emulsion was formulated by the spontaneous micro emulsification method using 8 % isopropyl myristate, 24 % Labrasol, 8 % plurol oleique and 60 % water as an external phase. All plain and isotretinoin-loaded micro emulsions were clear and showed physicochemical parameters for the desired topical delivery and stability. The permeation profiles of isotretinoin through rat skin from selected microemulsion formulation followed zero-order kinetics. Microemulsion-based gel was prepared by incorporating Carbopol971 in optimized micro emulsion formulation having suitable skin permeation rate and skin uptake. Microemulsion-based gel showed desired physicochemical parameters and demonstrated advantage over marketed formulation in improving the skin tolerability of isotretinoin, indicating its potential in improving topical delivery of isotretinoin. The developed micro emulsion based gel may be a potential drug delivery vehicle for targeted topical delivery of isotretinoin in the treatment of acne.