The aim of this study was to formulate and evaluate Ketoconazole-loaded solid lipid nanoparticles (KSLN) for topical application. The purpose of this study was to improve the therapeutic activity of Ketoconazole. KSLN was prepared by a hot homogenization method and characterized for shape, surface morphology, particle size, drug entrapment, cytotoxicity, and rheological analysis. The optimized formulation of solid lipid nanoparticles (SLN) was spherical in shape with a smooth surface and possessed an average size of $172.2{pm}0.75nm$ with zeta potential of $-44.12{pm}0.76mV$. To guarantee the stability of the desired SLN, they were lyophilized using cryo-protectants. The particle size of the SLN significantly enlarged for formulations which were lyophilized without the cryo-protectants. Cell viability assay performed on National Institute of Health-3-day transfer, inoculum $3{ imes}10^5$ cells (NIH-3T3) fibroblast cells showed that properties of the SLN remain unchanged during the process of freeze-drying and were not cytotoxic. An in vitro drug release study showed that KSLN-incorporated hydrogel exhibited a sustained drug release comparing to KSLN dispersion and Ketoconazole loaded hydrogel over a 24 h period. The in vivo studies suggested that the KSLN-incorporated hydrogel was more efficient in the treatment of candidiasis. It may therefore be interpreted that the KSLN-incorporated hydrogel provides a sustained release of Ketoconazole for topical fungal infections and might be a promising delivery system to enhance the therapeutic activity of Ketoconazole.