AIM: Development and optimization of raloxifene hydrochloride loaded lipid nanocapsule hydrogel for transdermal delivery. METHOD: A 3 RESULTS: The numerical optimization suggested an optimal formula with desirability value of 0.852 and low prediction errors. The optimized formulation showed good % drug entrapment efficiency (79.56 ± 2.34%), nanometer size (56.68 ± 1.2 nm), monodisperse nature (PDI = 0.176 ± 0.2), spherical morphology and good drug-excipient compatibility. The raloxifene hydrochloride loaded lipid nanocapsule hydrogel showed shear thinning properties, sustained drug delivery, dermal compatibility and significantly higher permeability (2-fold), retention (3.37) for raloxifene hydrochloride compared to the control. CONCLUSION: The present study showed a successful development of raloxifene hydrochloride loaded lipid nanocapsule hydrogel with improved skin permeation, retention, and good topical compatibility. This formulation may overcome the challenges associated with raloxifene hydrochloride oral delivery including low bioavailability.