Ethylcellulose-polyvinyl pyrrolidone films containing diltiazem hydrochloride and indomethacin were evaluated for their potential drug delivery at a controlled rate, using rat skin, to select a suitable formulation for the development of transdermal drug delivery systems. The influence of film composition, initial drug concentration, and film thickness on the in vitro drug release rate as well as drug permeation through rat abdominal skin were studied. Drug release studies were carried out employing the paddle over disk method and drug permeation through full thickness of the rat abdominal skin was tested using a modified Franz diffusion cell fastened with O-ring. The drug content of the film decreased at an apparent first-order rate, whereas the quantity of drug released was proportional to the square root of time. The release rates of both drugs increased linearly with increasing drug concentration and polyvinyl pyrrolidone fraction in the film, but was found to be independent of film thickness. The increase in release rate may be due to leaching of hydrophilic fraction of the film former which resulted in the formation of pores. It was also observed that the release of drugs from the films followed a diffusion-controlled model at low drug concentrations. A burst effect was observed initially, however, at high drug loading levels. This may be due to rapid dissolution of the surface drug followed by the diffusion of drug through the polymer network in the film. The in vitro skin permeation profiles showed increased flux values with increase of initial drug concentration in the film and also with the concentration of polyvinyl pyrrolidone. From this study, it is concluded that the films composed of ethylcellulose:polyvinyl pyrrolidone:diltiazem hydrochloride (8:2:2) and ethylcellulose:polyvinyl pyrrolidone:indomethacin (8:2:3) should be selected for the development of transdermal drug delivery systems, using a suitable adhesive layer and backing membrane, for potential therapeutic use.