Microemulsions are isotropic, thermodynamically stable transparent (or translucent) systems of oil, water, and surfactant, frequently in combination with a cosurfactant with a droplet size usually in the range of 20-200 nm. Since their discovery, they have attained increasing significance both in basic research and in industry. Due to their distinct advantages such as enhanced drug solubility, thermodynamic stability, facile preparation, and low cost, uses and applications of microemulsions have been numerous. Recently, there is a surge in the exploration of microemulsion for transdermal drug delivery for their ability to incorporate both hydrophilic (5-fluorouracil, apomorphine hydrochloride, diphenhydramine hydrochloride, tetracaine hydrochloride, and methotrexate) and lipophilic drugs (estradiol, finasteride, ketoprofen, meloxicam, felodipine, and triptolide) and enhance their permeation. Very low surface tension in conjunction with enormous increase in the interfacial area due to nanosized droplets of the microemulsion influences the drug permeation across the skin. A large number of oils and surfactants are available, which can be used as components of microemulsion systems for transdermal delivery but their toxicity, irritation potential, and unclear mechanism of action limit their use. Besides surfactants, oils can also act as penetration enhancers (oleic acid, linoleic acid, isopropyl myristate, isopropyl palmitate, etc.). The transdermal drug delivery potential of microemulsions is dependent not only on the applied constituents of the vehicle but also drastically on the composition/internal structure of the phases which may promote or hamper the drug distribution in the vehicles. This article explores microemulsion as transdermal drug delivery vehicles with emphasis on components selection for enhanced drug permeation and skin tolerability of these systems and further future directions.