The development of effective therapy is necessary because the patients have to contend with long-term therapy as skin fungal infections usually relapse and are hardly treated. Despite being a potent antifungal agent, luliconazole (LCZ) has certain shortcomings such as limited skin penetration, low solubility in aqueous medium, and poor skin retention. Solid Lipid Nanoparticles (SLNs) were developed using biodegradable lipids by solvent injection method and were embodied into the gel base for topical administration. After in-vitro characterizations of the formulations, molecular interactions of the drug with excipients were analyzed using in-silico studies. Ex-vivo release was determined in contrast to the pure LCZ and the commercial formulation followed by in-vivo skin localization, skin irritation index, and antifungal activity. The prepared SLNs have an average particle size of 290.7 nm with no aggregation of particles and homogenous gels containing SLNs with ideal rheology and smooth texture properties were successfully prepared. The ex-vivo LCZ release from the SLN gel was lower than the commercial formulation whereas its skin deposition and skin retention were higher as accessed by CLSM studies. The drug reaching the systemic circulation and the skin irritation potential were found to be negligible. The solubility and drug retention in the skin were both enhanced by the development of SLNs as a carrier. Thus, SLNs offer significant advantages by delivering long lasting concentrations of LCZ at the site of infection for a complete cure of the fungal load together with skin localization of the topical antifungal drug.