The objective of the present study was to formulate an insulin emulgel, selection of an optimize formulation through in vitro drug release kinetics and finally evaluate its hypoglycemic activity in animal model. Insulin emulgel was prepared using emu oil as penetration enhancer with the combination of carbomer or hydroxypropyl methylcellulose (HPMC) as gelling agent and polysorbate 80 as emulsifier. The response of gelling agent type (carbomer or HPMC) and concentration of other two variables penetration enhancer and emulsifier were studied using 2(3)factorial design during in vitro drug release through excised rat skin. Biological activity of emulgel formulation was also investigated using Albino rabbits alone and in combination with iontophoresis. The in vivo efficacy of insulin emulgel was assessed by measuring the blood glucose level at start of the experiment and after every 15 minutes interval for 120 minutes. Total eight formulations were studied. F4 formulation showed maximum insulin permeation flux (4.88 ± 0.09 μg/cm(2)/hour) through excised rat skin. Insulin permeation from these formulations was found to follow the Korsmeyer-Peppas model (r(2) =0.975 to 0.998) during 24 hour with non-Fickian mechanism. Formulation F4 was further investigated in Albino rabbits. For the first group (treated with insulin emulgel alone) the blood glucose level decreased from initial value 250±10mg/dl to 185±7mg/dl at 120 minutes and for the second group (treated with insulin emulgel plus iontophoresis) the blood glucose level decreased to 125±5mg/dl in 120 minutes (P<0.05). It was observed that absorption of insulin through transdermal emulgel was greater in combination with iontophoresis to decrease blood glucose level. On the basis of this study, it has been shown that application of insulin emulgel iontophoretically can be used as alternative (acceptable & painless) to injectable insulin subject to further studies on large animals.