Objective: Formulation and characterization of Methotrexate loaded nanostructured lipid carriers (NLC) hydrogel offering improved performance in terms of drug loading and long-term stability for topical drug delivery and treatment of atopic dermatitis. Methods: Drug-loaded NLC formulation was designed by solvent diffusion technique, which was optimized using 32 full factorial designs. The mean diameter and surface morphology of MTX-NLCs was evaluated. MTX-NLCs were integrated in 1%, 1.5% and 2.0% w/w Carbopol 934 P gel base, and in vitro skin deposition studies in human cadaver skin (HCS) were carried out. Results: For drug loaded formulation the particle size was found in nanometric range. The optimized MTXNLCs were oval shaped, with an average particle size of 246 ± 7.98 nm, a zeta potential of −24.6±0.98 mV, and EE of 55.00±2.17%. Significantly higher deposition of MTX was found in HCS from MTX-NLC gel (70.45 ±3.98%) as compared to MTX plain gel (40.12±1.12%). Conclusion: The formulated NLC is a potential approach for sustained release of drug which may reduce systemic side effects, increase skin retention time and duration of action. Further in vivo studies will confirm the effect of NLC to increase skin retention time, decreases systemic absorption of the corticosteroid thereby avoiding side effects.