The present study is concerned with the QbD-based design and development of luliconazole-loaded nanostructured lipid carriers (NLCs) hydrogel for enhanced skin retention and permeation. The NLCs formulation was optimized employing a 3-factor, 3-level Box-Behnken design. The effect of formulation variable lipid content, surfactant concentration, and sonication time was studied on particle size and % EE. The optimized formulation exhibited particle size of 86.480 ± 0.799 nm; 0.213 ± 0.004 PDI, ≥ - 10 mV zeta potential and 85.770 ± 0.503% EE. The in vitro release studies revealed sustained release of NLCs up to 42 h. The designed formulation showed desirable occlusivity, spreadability (0.748 ± 0.160), extrudability (3.130 ± 1.570), and the assay was found to be 99.520 ± 0.890%. The dermatokinetics assessment revealed the C to be ~ 2-fold higher and AUC to be ~ 3-fold higher in the epidermis and dermis of NLCs loaded gel in contrast with the marketed cream. The T of both the formulations was found to be 6 h in the epidermis and dermis. The obtained results suggested that luliconazole NLCs can serve as a promising formulation to enhance luliconazole's antifungal activity and also in increasing patient compliance by reducing the frequency of application.