Transdermal delivery of insulin is a great challenge due to its poor permeability through the skin. The aim of the current investigation was to evaluate the prospective of insulin loaded niosome emulgel as a noninvasive delivery system for its transdermal therapy. A 23 full-factorial design was used to optimize the insulin niosome emulgel by assessing the effect of independent variables (concentration of paraffin oil, Tween 80 and sodium carboxymethyl cellulose) on dependent variables (in vitro release, viscosity and in vitro permeation). The physical characteristics of the prepared formulations were carried out by determining viscosity, particle size, entrapment efficiency, drug loading, drug release and kinetics. In vitro permeation studies were carried out using rat skin membrane. Hypoglycemic activity of prepared formulations was assessed in diabetic-induced rats. It was observed that the independent variables influenced the dependent variables. A significant difference (p < 0.05) in viscosity was noticed between the prepared gels, which in turn influenced the insulin release. The order of permeation is: insulin niosome emulgel > insulin niosome gel > insulin emulgel > insulin gel > insulin niosomes > insulin solution. The enhancement in transdermal flux in insulin niosome emulgel was 10-fold higher than the control (insulin solution). In vivo data significantly demonstrated reduction (p < 0.05) of plasma glucose level (at six hours) by insulin niosome emulgel than other formulations tested. The results suggest that the developed insulin niosome emulgel could be an efficient carrier for the transdermal delivery of insulin.