The present study was undertaken to prepare and evaluate transdermal gels of diclofenac diethylamine (DDEA) containing penetration enhancers such as olesan oil and dimethyl sulfoxide (DMSO). Transdermal gels were prepared using different polymers such as carbopol-940, polyvinyl alcohol (PVA), hydroxy propyl methyl cellulose-K(4) M, hydroxy propyl cellulose-M, and sodium carboxy methyl cellulose. The formulated gels were subjected to physicochemical studies, in vitro release studies and in vitro skin permeations studies and were evaluated for drug content, viscosity, extrudability, spreadability, and pH. The in vitro release studies of prepared gels were performed using specially designed Fites cell and in vitro skin permeation studies were performed using keshary-chien diffusion cell through rat skin. Selected formulations were evaluated for their antiinflammatory activity using the carrageenan-induced paw edema in rats. The carbopol-940 and PVA gels containing 10% DMSO showed best in vitro skin permeation of DDEA. In vivo study for the selected formulation showed a sustained reduction in inflammation in the carrageenan induced paw edema in rats. The efficacies of carbopol-940 and PVA gels were also compared with that of the marketed Voveran gel,(R) and it was found that carbopol and PVA gels produced better results than the Voveran gel. (c) 2006 Prous Science. All rights reserved.