Aim: This study aimed to develop and evaluate a novel emulgel formulation of ketoconazole to overcome its poor solubility and limited skin permeability, thereby enhancing its topical delivery and antifungal efficacy. Methodology: Ketoconazole was incorporated into an oil-in-water emulsion, which was then combined with a suitable gelling agent to form the emulgel. Various oils, emulsifiers, and gelling agents were optimized to achieve better drug release and skin permeation. The formulations were evaluated for physical appearance, pH, spreadability, viscosity, and drug content uniformity. In vitro skin permeation studies were conducted using excised rat skin to compare the permeation profile of the emulgel with a conventional ketoconazole cream. Ex vivo antifungal efficacy was assessed against Candida albicans to determine the therapeutic potential of the emulgel. Results: The optimized ketoconazole emulgel exhibited ideal physicochemical properties, including an appropriate pH, superior spreadability, and viscosity suitable for topical application. In vitro permeation studies revealed a 3-fold increase in skin penetration compared to the conventional cream. Ex vivo antifungal studies demonstrated enhanced antifungal activity, with the emulgel showing significantly higher efficacy against Candida albicans than the conventional cream. Conclusion: The development of a ketoconazole emulgel offers a promising strategy for improved topical delivery and antifungal efficacy. By enhancing skin penetration and providing sustained drug release, this emulgel system addresses the limitations of traditional formulations. Further clinical studies are recommended to explore its potential for treating superficial fungal infections.