Glipizide is one of the most commonly prescribed drugs for treatment of type 2 diabetes. It acts by decreasing the amount of sugar made in liver. Oral therapy with Glipizide comprises problems of bioavailability fluctuations and may be associated with severe hypoglycaemia and gastric disturbances. As a potential for convenient, safe and effective antidiabetic therapy, the rationale of this study is to develop a transdermal delivery system for Glipizide inorder to improve its therapeutic efficacy. In the preparation of films, chitosan was used as polymer. Inclusion complex of glipizide with β-Cyclodextrin was formed and compared with the control (F1).The films were characterized for thickness, tensile strength, drug content, moisture uptake, moisture content, and drug release. In vivo and skin irritation studies were performed for the optimized film. Films containing Chitosan (1.5% w/v) showed the highest drug content 97.65% and the drug release was 96% in a period of 24 hours. The values of thickness, weight variation, and folding endurance of the prepared formulations shows highest values as the polymer concentration increases.The release data fitted into kinetic equations, yielded Higuchi plot and diffusion mechanism of drug release. The physical evaluation indicated the formation of smooth, flexible and translucent films. No skin irritation occurred on rat skin and the infrared studies showed the compatibility of the drug with the formulation excipients. The ex vivo study revealed a constant permeation of drug for long periods.The obtained results indicated the feasibility for transdermal delivery of Glipizide using Chitosan.