Transdermal delivery system has gained significance in drug delivery owing to its advantages over the conventional delivery systems. However, the barriers of stratum corneum along with skin irritation are its major limitations. Various physical and chemical techniques have been employed to alleviate these impediments. Among all these, transfersomes have shown potential for overcoming the associated limitations and successfully delivering therapeutic agents into systemic circulation. These amphipathic vesicles are composed of phospholipids and edge activators. Along with providing elasticity, edge activator also affects the vesicular size and entrapment efficiency of transfersomes. The mechanism behind the enhanced permeation of transfersomes through the skin involves their deformability and osmotic gradient across the application site. Permeation enhancers can further enhance their permeability. Biocompatibility; capacity for carrying hydrophilic, lipophilic as well as high molecular weight therapeutics; deformability; lesser toxicity; enhanced permeability; and scalability along with potential for surface modification, active targeting, and controlled release render them ideal designs for efficient drug delivery. The current review provides a brief account of the discovery, advantages, composition, synthesis, comparison with other cutaneous nano-drug delivery systems, applications, and recent developments in this area.