Background: The success story of liposomes in the treatment of systemic infectious diseases and various carcinomas lead the scientists to the innovation of elastic vesicles to achieve similar success through transdermal route. In this direction, ethosomes and transfersomes were developed with the objective to design the vesicles that could pass through the skin. However, there is a lack of systematic review outlining the principles, method of preparation, latest advancement and applications of ethosomes and transfersomes. This review covers various aspects that would be helpful to scientists in understanding advantages of these vesicular systems and designing a unique nano vesicular delivery system.Methods: Structured search of bibliographic databases for previously published peer-reviewed research papers was explored and data was culminated in terms of principle of these vesicular delivery systems, composition, mechanism of actions, preparation techniques, methods for their characterization and their application. Results: A total of 182 papers including both, research and review articles, were included in this review in order to make the article comprehensive and readily understandable. The mechanism of action and composition of ethosomes and transfersomes was extensively discussed. Various methods of preparation such as, rotary film evaporation method, reverse phase evaporation method, vortex/ sonication method, ethanol injection method, freeze thaw methods, along with their advantages has been discussed. It was also discussed that both these elastic nanocarriers offer unique advantages of ferrying the drug across membranes, sustaining drug release as well as protecting the encapsulated bio actives from external environment. The enhanced bioavailability and skin penetration of ethosomes as compared to conventional vesicular delivery systems is attributed to the presence of ethanol in the bilayers while that for transfersomes accrues due to their elasticity along with their ability to retain their shape because of the presence of edge activators. Successful delivery of synthetic drugs as well as phytomedicines has been extensively reported through these vesicles. Conclusion: Though these vesicular systems offer a good potential for rational drug delivery, a thoughtfully designed process is required to optimize the process variables involved. Industrial scale production of efficacious, safe, cost effective and stable formulations of both these delivery systems appears to be a pre-requisite to ensure their utility as the trans-dermal vehicles.