The aim of the present research work was to develop and evaluate provesicular topical drug delivery system of indomethacin. The encapsulation of drug in vesicular structure prolongs the existence of the drug in the systemic circulation with improved bioavailability. The potential of proniosomes as a topical drug delivery system was explored by formulating proniosomal gel of indomethacin using coacervation-phase separation method with different ratios of sorbitan fatty acid esters (Span 60) and cholesterol. The formulations were characterized for various parameters like vesicle size and shape, drug entrapment, in vitro drug release profiles and vesicular stability at different storage conditions. In-vitro studies showed slow and sustained release of entrapped indomethacin. Stability studies for optimized proniosomal gel were conducted for 3 months. The current research work demonstrated that proniosomes are stable and promising topical drug delivery system for indomethacin.