This study aimed to develop microsponges based topical gel formulation of 5-Fluorouracil (5-FU) for the treatment of skin cancer with enhanced skin deposition and reduced skin irritation potential. Microsponges were prepared by Quasi-emulsion solvent diffusion method using ethyl cellulose and Eudragit RL 30 D; and was optimised through detailed in vitro characterisation. Brunauer-Emmett-Teller (BET) analysis demonstrated higher surface area (2.4393 m(2)/g) and pore volume of developed microsponges formulation. Optimised formulation showed better thixotropic and texture properties compared to commercial cream formulation, used as control for comparison purpose. Further, the optimised formulation demonstrated 5.5-fold increase in skin deposition documented via in-vivo local bioavailability study, with significant reduction in skin irritation compared to the commercial formulation. Hence, the developed microsponges based formulation seems to be a viable alternative with enhanced topical delivery of 5-FU as compared to the commercial formulation.