The field of skin sensitization and dermal toxicity is evolving to accurately predict dermal responses in humans for topically applied pharmaceutical formulations. Nanoemulsions are nano globular pharmaceutical systems having globules size in nanometre and hence they have high potential to increase the permeation of drugs through the skin. The objective of this study is to understand how a nanoparticulate matrix of a pharmaceutical formulation effects skin sensitization and dermal toxicity when compared to conventional macroemulsion formulation. Interpretation of dermal toxicity and skin sensitization studies on a nanoemulsion of Acyclovir was performed and compared with macroemulsions and conventional marketed formulation. Nanoemulsion was developed through cold emulsification process using inline homogenization technique. In this study it was found that nanoemulsion did not induce any sensitization reactions while comparing the same with existing marketed formulations and graded as weak in sensitization score and rate. Acute dermal toxicity test in Guinea pigs did not show any overt signs of toxicity following a 15-day period time. Basis this study, the finding suggests that the nanoemulsion gel does not cause any skin irritation, skin sensitization or dermal toxic effects following dermal applications.