Novel drug delivery systems are now a days is creating a new interest in development of drug deliveries. Vesicular drug delivery system is also a part of these novel drug delivery systems. TDDS is the permeability of the skin, it is permeable to small molecules, lipophilic drug and highly impermeable to the macromolecules and hydrophilic drugs. Recent approaches have resulted in design of two vesicular carriers, ethosomes and ultra flexible lipid based elastic vesicles, transferosomes. Transferosomes have recently been introduced, which are capable of transdermal delivery of low as well as high molecular weight drugs. This offers several potential advantages over conventional routes like avoidance of first pass metabolism, predictable and extended duration of activity, minimizing undesirable side effects, utility of short half life drugs, improving physiological and pharmacological response and have been applied to increases the efficiency of the material transfer across the intact skin, by the use of penetration enhancers, iontophoresis, sonophoresis and use of colloidal carriers such as lipid vesicles (liposomes & proliposomes) and non-ionic surfactant vesicles (niosomes & proniosomes). It is suitable for controlled and targeted drug delivery and it can accommodate drug molecules with wide range of solubility. Due to its high deformability it gives better penetration of intact vesicles. They are biocompatible and biodegradable as they are made from natural phospholipids and have high entrapment efficiency. The preparation variables are depending upon the procedure involved for manufacturing of formulation and the preparation procedure was accordingly optimized and validated. Characterization of transferosomes can be done to know the vesicle size, morphology, drug content, entrapment efficiency, penetration ability, occlusion effect, surface charge, in vitro drug release, in vitro skin penetration etc., It increases stability of labile drugs and provides control release. Transferosomes thus differs from such more conventional vesicles primarily by its softer, more deformable, better adjustable artificial membrane.