The objective of the present investigation was to formulate solid lipid nanoparticles (SLN) and nanostructured lipid carriers (NLC) for improving the dermal delivery of a local anesthetic agent lidocaine (LID). SLN and NLC were characterized for particle size distribution, polydispersity index, entrapment efficiency, X-ray powder diffraction pattern (XRD), thermal behavior by differential scanning colorimeter (DSC) and surface morphology by transmission electron microscopy (TEM). LID-loaded SLN and NLC were formulated into hydrogels for topical application. The in vitro permeation profiles of LID SLN gel, LID NLC gel, and a marketed LID formulation (Xylocaine® gel) were evaluated by using guinea pig skin. The in vivo efficacy of LID SLN gel, LID NLC gel, and a marketed LID formulation (Xylocaine® gel) gel was evaluated on guinea pig using pinprick test. LID SLN showed a particle size of 78.1 nm with a polydispersity index of 0.556, whereas LID NLC showed a particle size of 72.8 nm with a polydispersity index of 0.463. The entrapment efficiency of LID in both SLN and NLC was 97% and 95.9%, respectively. The TEM studies revealed the almost spherical nature of LID SLN and NLC formulations. The XRD and DSC studies of LID SLN suggested amorphization of drug in the carrier system. The SLN formulation was stable with respect to particle size, polydispersity, and entrapment efficiency for 6 months at 40°C/75% relative humidity (RH). Negligible leakage was observed for the NLC formulation when stored for 1 month at 40°C/75% RH. In vitro permeation studies indicated that LID SLN gel and LID NLC gel significantly sustained the LID release compared to that of Xylocaine® gel. The in vivo efficacy results supported the results of the in vitro permeation studies wherein the LID SLN gel and LID NLC gel resulted in fivefold and sixfold increase in duration of anesthesia, respectively, compared to that of Xylocaine® gel.