The current study aimed to optimize a bilosomal gel (bilo-gel) formulation loaded with anti-diabetic empagliflozin. Enhancement of transdermal delivery of empagliflozin was targeted to sustain the empagliflozin release and boost its pharmacological activity, therefore enhancing patient compliance. I-optimal design was followed to study how using different components at different concentrations could affect the bilosomal characteristics. Optimized bilosomal formulation was incorporated into different hydrogels and subjected to various physicochemical evaluations. Ex-vivo permeation, histopathological, and pharmacodynamic assessments were executed to inspect the adequacy of optimized bilo-gel. Results disclosed the influence of span 60-cholesterol mixture on encapsulating high empagliflozin amounts and extending its release over time. High bile salt amounts could participate in minimizing particle size and raising negative zeta potential of bilosomes. Sodium tauroglycocholate (STGC) demonstrated greater drug entrapment, zeta potential, and sustained drug release than sodium deoxycholate (SDC). Higher entrapment efficiency, lower particle size, and greater zeta potential values were exhibited by bilosomes containing span 60 than those containing span 40. Optimized bilo-gel formulation (G4) exhibited acceptable gel strength (30.25 s) and satisfactory sustained release profile close to that of optimized liquid bilosome. It showed higher steady state flux when compared to control gel. Such formulation displayed no signs of inflammation or irritation when being histopathologically studied. In comparison to oral drug suspension and control gel, transdermal bilo-gel achieved an improved diabetic control on hyperglycemia-induced rats along the study duration. Meanwhile, optimized bilo-gel emphasized its potential to present a novel transdermal strategy delivering anti-diabetic empagliflozin with prominent in-vitro and in-vivo performance.