Griseofulvin-loaded solid lipid nanoparticles (SLNs) were prepared by hot microemulsion technique and optimized for type and concentration of lipid and surfactant. The optimized SLN composition was characterized in terms of particle shape and size, drug entrapment efficiency, pH, stability, spreadability, ex-vivo skin permeation, dermatokinetics, skin sensitivity, in vitro antifungal assay and in vivo antifungal activity against Microsporum canis using guinea pig model for dermatophytosis. The cumulative amount of drug permeated through excised mice skin from SLNs was more than 5-folds as compared to permeation from conventional cream base. Fluorescent microscopy revealed presence of nanoparticles in the skin layers suggesting the penetration of nanoparticles into the skin owing to their nano-size and thence a controlled drug release. A complete mycological and clinical cure was observed in M. canis infected guinea pigs after twice daily application of SLN gel containing griseofulvin for 8 days. Also, the formulation was observed to be non-sensitizing, histopathologically safe, and SLN gel was stable at 5 +/- 3 degrees C, 25 +/- 2 degrees C and 40 +/- 2 degrees C for a period of six months. It can be concluded from our study that SLNs provide a good skin permeation effect and may be a promising carrier for topical delivery of griseofulvin.