Lornoxicam is a non-steroidal anti-inflammatory poorly water soluble drug. In this study, three lornoxicam liposomal gel formulations were prepared to improve its skin permeation and hence potentiate its local anti-inflammatory effect. The prepared formulations were traditional liposomes containing cholesterol (F1), ultra-deformable liposomes containing Tween 80 (F2) and modified liposomes containing cholesterol and Tween 80 (F3). All liposomal formulations were incorporated in 1% carbopol 974 as gelling agent. Liposomes were evaluated for its particle size, zeta potential, drug entrapment efficiency percent and stability for 90 days at 4 °C while liposomal gel formulations were characterized for its in vitro lornoxicam release and ex vivo permeation through rat skin. Anti-inflammatory effect of lornoxicam gel formulations were evaluated in rats using carrageenan induced paw edema. In the study, the obtained liposomes had particle size of 451 nm, 112 nm and 223 nm for F1, F2 and F3 respectively and entrapment efficiency % of 79.4%, 56.5% and 68.8% for F1, F2 and F3 respectively. The stability study revealed that F1 vesicles have high physical stability followed by F3, while F2 showed the lowest stability in terms of vesicles size and entrapment efficiency %. The in vitro and ex vivo results showed higher drug release and permeability from F2 and F3 than that of F1. In addition, the results in this study revealed that lornoxicam liposomal formulations have significant higher anti-inflammatory effect than that of lornoxicam gel. All liposomal gel formulations have the ability to enhance lornoxicam anti-inflammatory effect in rats paw edema in comparison with lornoxicam gel.