Skin diseases are among the most prevalent non-fatal conditions worldwide. The transdermal drug delivery system (TDDS) has emerged as a promising approach for treating skin diseases, owing to its numerous advantages such as high bioavailability, low systemic toxicity, and improved patient compliance. However, the effectiveness of the TDDS is hindered by several factors, including the barrier properties of the stratum corneum, the nature of the drug and carrier, and delivery conditions. In this paper, we provide an overview of the development of the TDDS from first-generation to fourth-generation systems, highlighting the characteristics of each carrier in terms of mechanism composition, penetration method, mechanism of action, and recent preclinical studies. We further investigated the significant challenges encountered in the development of the TDDS and the crucial significance of clinical trials.