The aim of this study was to investigate the effect of deformable liposomes with sodium cholate on the skin permeation and skin deposition of arbutin, a hydrophilic skin-whitening agent. Various compositions of liposomes were prepared by the extrusion method. Particle size distribution and entrapment efficiency were determined by the laser light scattering and the gel permeation chromatography, respectively. The in vitro rat skin permeation and deposition of arbutin in various skin layers were investigated using the Keshary-Chien diffusion cells at $37^{circ}C$. The average particle size of the deformable liposomes ranged from 217.4 to 117.4 nm, depending on the composition. The entrapment efficiency was dependent on surfactant concentration and loading dose of arbutin. The permeation rate of 5% arbutin in deformable liposomes was $8.91({pm}1.33){mu}g/cm^2/h$, and was not significantly different from 5% arbutin aqueous solution $[9.82({m}0.86){mu}g/cm^2/h]$. The deposition of arbutin was $43.34({pm}12.13)$ and $16.99({pm}7.83){mu}g/cm^2$ in stratum corneum layer and epidermis/dermis layer, respectively, after 12 h of permeation study. These results are consistent with several earlier studies for the localization effect of liposomal formulations in stratum corneum, and demonstrated the feasibility of the deformable liposomes as a promising carrier for the skin deposition of hydrophilic skin-whitening compounds.