Onychomycosis significantly impacts approximately 20% of the global population. The physical barriers of the nail structure make fungal infections a persistent therapeutic challenge. Traditional approaches, including topical and oral antifungal agents, have limitations such as toxicities, low nail permeability, adverse effects, and high recurrence rates. Consequently, emerging lipid-based delivery systems have gained interest because of their potential to address these drawbacks. Nanostructured lipid carriers (NLCs), solid lipid nanoparticles (SLNs), liposomes, and transferosomes are innovative formulations that offer enhanced drug solubility, sustained release, and targeted delivery to the nail matrix. These lipid-mediated approaches have shown promise in overcoming the hurdles associated with conventional therapies, thereby improving treatment outcomes, patient compliance, and the overall quality of life. A comprehensive review focusing on the potential of lipid-based drug delivery systems in treating onychomycosis is lacking in the existing literature. This review explores various aspects of the clinical presentation of onychomycosis, available treatments, challenges associated with treatment, formulation science related to lipid-based vehicles and their applications, highlighted by the promising aspects of these novel formulations, and provides insights into clinical developments. In addition, the regulatory perspective is critical to such development, and approval is discussed, particularly in managing regulatory compliance complexities to ensure successful implementation. The holistic approach provides a comprehensive basis for determining lipid-based drug delivery systems' state-of-the-art and future scope.