This investigation was aimed at developing a gel formulation of naloxone (CAS 465-65-6) for transdermal administration. The course of development includes formulation of gels using a solvent system reported previously from our laboratory, their stability evaluation, in vitro release and in vitro permeation studies of naloxone using excised rat skin. Further, selected gel was refined for improved permeation using terpenes and fatty acids, and finally evaluated in vivo using Sprague-Dawley rats. Gels were prepared using polymers hydroxypropyl methylcellulose (HPMC), polyacrylic acid (Carbopol 940), and hydroxypropyl cellulose(HPC) - which are known to gel in presence of high proportions of ethanol (EtOH) and their stability was evaluated for 3 weeks using rheology as a marker. HPC gels in the optimized vehicle (EtOH and propylene glycol (PG) (2:1)) were shown to be stable for three weeks at 25 +/- 0.3 degreesC. In vitro studies revealed that permeation flux of naloxone from gels across rat skin was above the required in vivo levels. Further, penetration enhancers were incorporated into gel and were evaluated in vitro. Among the penetration enhancers investigated, terpenes (100-160 mug/cm(2) . h) were more effective than oleic: acid (60 mug/cm(2) . h) in enhancing flux. On the other hand, lag time observed with oleic: acid was very low (7 h) when compared to terpenes (24-28 h). Based on these observations, the gel formulation containing 5 % oleic acid as penetration enhancer was further evaluated in vivo in rats, which resulted in steady state levels of 8-16 mug/ml after single-dose transdermal administration. These in vivo levels were 4 times higher than those predicted from in vitro data. Therefore, flexibility in the size of the patch can he expected in order to design various dosage regimens dictated by clinical need.