Budesonide is an anti-inflammatory glucocorticoid belonging to BCS (Biopharmaceutical classification system) class II drug having less aqueous solubility and higher permeability. Topically it is used for treatment of psoriasis, severe eczema, red lichen and lesions those are not caused by microorganisms. It is available in form of ointment in European countries for treatment of psoriasis. Budesonide is subject to high first pass metabolism (80-90%).Bioavailability of budesonide is only 10-20% when administered orally. The aim of the research was to develop a microemulsion based gel of budesonide for treatment of topical inflammatory diseases. Microemulsion gels are mixture of microemulsion and gel having properties of both. Solubility of budesonide was determined and microemulsion was prepared using Oleic acid as oil, Cremophor EL as surfactant and Transcutol P as co-surfactant. Gel phase was formulated using Carbapol 940 and Sodium carboxymethyl cellulose as gelling agents. Microemulgel was optimized with factorial design. It can be concluded that a stable, effective and elegant microemulgel was formulated.