Mosquito-borne diseases affect millions of people worldwide each year, and the use of a topically applied insect repellent is an economically viable preventative health practice. The general objective of this work was to encapsulate citronella oil (CO) in a nanostructured lipid carrier (NLC) to formulate a topical repellent with a long duration of efficacy on the skin and a good safety profile based on minimizing skin penetration. In the studied CO, the main chemical constituents of geraniol, citronellal, and citronellol were identified and subsequently used as markers for the in vitro skin permeation testing (IVPT). An optimal NLC encapsulating CO formulation was developed and had an average particle size of 350 nm. The NLC was then formulated in combination with CO at ratios of 2:1, 1:1, and 1:2 CO:NLC-CO as oil-in-water (O/W) emulsions and compared to CO in the same O/W emulsion base (all at 10% CO in the final O/W topical formulation). The markers geraniol, citronellol, and citronellal were detected in all samples tested F1 (10% CO in O/W emulsion) and F3 (10% CO/NLC-CO 1:1 in O/W emulsion). Even the percentages of F3 markers were higher than F1. The recovery of the percentage balance (based on the total remaining on the skin surface, on the skin, and penetrated through the skin to the receptor) of geraniol, citronellol, and citronellal markers for F1 and F3 was 7.70% and 11.96%; 25.51% and 31.89%; and 5.09% and 4.40%, respectively. The nanoparticle lipid solid forms a repellent reservoir on the skin surface, releasing the active ingredients slowly through volatilization, extending the repellent action, and reducing permeation through the skin. It is possible to assume that the remaining 92.30% and 88.03%; 74.49% and 68.11%; and 94.10% and 95.60% of geraniol, citronellol, and citronellal markers of F1 and F3, respectively, were lost to evaporation. In the in vivo efficacy test carried out with the Aedes aegypti mosquito, F3 was the optimal formulation, providing the greatest repellent action compared to free oil in O/W emulsion. Thermal analysis showed that the NLC-CO raised the boiling point of the encapsulated CO compared to the free oil, suggesting that the controlled release of the CO was a possible mechanism for its prolonged effect. We concluded that the nanocarriers developed with CO were stable and provided improved mosquito-repellent efficacy with minimal skin penetration of the CO actives over 24 h. Indeed, regardless of whether the CO was applied as free oil, a 1:1 mixture of CO (pure/free oil) or NLC-CO applied in an O/W emulsion can be considered safe for topical application due to minimal skin penetration.