Glimepiride (GMP), an oral hypoglycemic agent is extensively employed in the treatment of type 2 diabetes. Transdermal delivery of GMP has been widely investigated as a promising alternative to an oral approach but the delivery of GMP is hindered owing to its low solubility and permeation. The present study was designed to formulate topical nanoemulgel GMP system and previously reported solubility enhanced glimepiride (GMP/βCD/GEL-44/16) in combination with anti-diabetic oil to enhance the hypoglycemic effect. Nanoemulsions were developed using clove oil, Tween-80, and PEG-400 and were gelled using xanthan gum (3%, w/w) to achieve the final nanoemulgel formulations. All of the formulations were evaluated in terms of particle size, zeta potential, pH, conductivity, viscosity, and in vitro skin permeation studies. In vivo hypoglycemic activity of the optimized nanoemulgel formulations was evaluated using a streptozocin-induced diabetes model. It was found that a synergistic combination of GMP with clove oil improved the overall drug permeation across the skin membrane and the hypoglycemic activity of GMP. The results showed that GMP/βCD/GEL-44/16-loaded nanoemulgel enhanced the in vitro skin permeation and improved the hypoglycemic activity in comparison with pure and marketed GMP. It is suggested that topical nano emulsion-based GMP gel and GMP/βCD/GEL-44/16 could be an effective alternative for oral therapy in the treatment of diabetes.