Background Self-emulsifying system-based lipstick may prove to have the potential of enhancing moisturizing characteristics and delivering hydrophobic drug antifungal drugs for the management of lip fungal infection, especially candidiasis. In this study, the self-emulsifying drug delivery system (SEDDs) of ketoconazole was obtained using IPM (Oil), Tween 80 (surfactant), and PEG 400 (co-surfactant). The medicinal lipstick was developed from the SEDDs, and the concentration of waxes (beeswax and carnauba wax) and cow ghee (penetration enhancer) was optimized using a Box–Behnken design. The lipstick formulations were assessed based on physicochemical features, such as pH, spreadability, softening point, breaking point, content uniformity, and in vitro drug permeation. Furthermore, the optimal lipstick formulation was tested for stability and antifungal activity. Results The optimized formulation showed exceptional results in physicochemical analysis and ~ 87% release of the drug in 12 h. The formulations displayed adequate stability for 4 weeks at various temperature conditions such as room temperature, 40 °C, and 45 °C. The zone of inhibition produced by lipstick formulation was significantly higher as compared to the reference standard (ketoconazole in ethanol) which shows high antifungal activity. Conclusion It was concluded from the outcomes that SEDDs-based lipstick formulation showed a lot of promise as a topical antifungal treatment option for Candidiasis. Graphical abstract
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