Niosomes are formations of vesicles by hydrating mixture of cholesterol and non-ionic surfactants. Different novel approaches used for delivering these drugs include liposomes, microspheres, nanotechnology, micro emulsions, antibody-loaded drug delivery, magnetic microcapsules, implantable pumps and niosomes. Niosomes and liposomes are equiactive in drug delivery potential and both increase drug efficacy as compared with that of free drug. Niosomes are preferred over liposomes because the former exhibit high chemical stability and economy. The application of vesicular (lipid vesicles and non-ionic surfactant vesicles) systems in cosmetics and for therapeutic purpose may offer several advantages. They improve the therapeutic performance of the drug molecules by delayed clearance from the circulation, protecting the drug from biological environment and restricting effects to target cells. This article focuses on the recent advances in niosomal drug delivery, potential advantages over other delivery systems, formulation methods, methods of characterization and the current research in the field of niosomes. Niosome appears to be a well preferred drug delivery system over liposome as niosome being stable and economic. Also niosomes have great drug delivery potential for targeted delivery of anti-cancer, anti-infective agents. Drug delivery potential of niosome can enhance by using novel concepts like proniosomes, discomes and aspasome. Niosomes also serve better aid in diagnostic imaging and as a vaccine adjuvant. Thus these areas need further exploration and research so as to bring out commercially available niosomal preparation.