The potential use of terpenes/terpenoids as penetration enhancers in the transdermal delivery of propranolol hydrochloride (PL) was investigated. PL was chosen for the reasons of its extensive first-pass metabolism and short elimination half-life. The terpenes studied included L-menthol, (+)-limonene, (+/-)-linalool, and carvacrol at 1%, 5%, and 10% w/v concentrations. The diffusion of PL across excised hairless mouse skin was determined using side-by-side diffusion cells. Flux, permeability coefficient (Pm), and lag time (tL) were calculated. PL showed comparable lag times with menthol at all three concentration levels. At a 1% level of carvacrol, PL exhibited a 2.4- and 2.2-fold increase in lag time compared with 5 and 10% levels of enhancer, respectively. In the presence of limonene, PL had shown maximum lag time (between 3.0 and 3.3 h) at all three levels. In the case of linalool, the lag times for PL with 5 and 10% levels of enhancer were 7.0- and 5.2-fold less compared with 1% level. A significant (p < 0.05) concentration effect was observed only with linalool. Hydrogel-based patches were formulated with or without menthol as enhancer. Release profiles from the hydrogel formulations obeyed zero-order kinetics. The permeability of propranolol was significantly higher (p < 0.05) from the test patch than the control (no enhancer) patch across the mouse skin. The mechanism of permeation enhancement of menthol could involve its distribution preferentially into the intercellular spaces of stratum corneum and the possible reversible disruption of the intercellular lipid domain. The results suggest the potential use of menthol as effective penetration enhancer in the delivery of significant amounts of PL through skin.