In order to reduce the systemic side effects and the gastrointestinal irritation of indomethacin following its oral administration, the drug was formulated as a transdermal gel using poloxamer 407. In vitro diffusion cells fitted with excised rat skins were used to evaluate the effects of formulation variables on skin permeation of indomethacin from poloxamer gels. The formulation variables were the concentrations of indomethacin, poloxamer 407 and ethanol, and the gel pH. The increase of the drug amount in the gel from 0.5% to 2.0% induced a direct but nonlinear increase in the skin permeation rate of indomethacin. The increase of poloxamer concentration from 17.5% to 25% in the gel resulted in a decrease of skin permeation rate of indomethacin, which was due to a reduction in the amount of free drug molecules available for permeation through skin by entrapping more drug molecules within the micelles formed by poloxamer. The increase of ethanol concentration from 10% to 20% in the gel resulted in a linear increase of permeation rate of indomethacin through skin, possibly due to the penetration enhancing effect of ethanol. The skin permeation of indomethacin was substantially influenced by the gel pH, exhibiting a maximum at pH 4.