Microemulsions are clear, thermodynamically stable, isotropic mixtures of oil, water and surfactant, frequently in combination with a co-surfactant. They offer numerous advantages like improved solubilization of both hydrophilic and lipophilic drugs, better bioavailability, prolong and targeted release, enhanced permeation across biological membranes, protection against oxidation, better stability and ease of manufacturing as well as processing. These systems are currently of interest to the pharmaceutical scientist because of their unique characteristics and considerable potential to act as drug delivery carrier by incorporating a wide range of drug molecules. In order to appreciate the potential of microemulsions as delivery carrier, this review gives an overview of the microemulsion properties, formulation, phase behaviour, characterization and application of microemulsions as a drug delivery carrier.