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Drug delivery systems are designed to transport therapeutic agents effectively to their intended site of action in the body while minimizing systemic side effects and improving therapeutic outcomes. Conventional dosage forms often suffer from limitations such as poor bioavailability, rapid degradation, non-specific distribution, and frequent dosing requirements. To overcome these challenges, advanced carrier-based drug delivery systems have gained significant attention. These systems play a crucial role in protecting drugs from premature degradation or elimination, enhancing drug stability, controlling drug release, and increasing drug concentration at the target site. Among various novel vesicular carriers, niosomes have emerged as a promising and efficient drug delivery system. Niosomes are microscopic vesicles formed by the self-assembly of non-ionic surfactants in an aqueous medium, often stabilized by the incorporation of cholesterol. Due to their unique structural characteristics and physicochemical properties, niosomes are capable of encapsulating both hydrophilic and lipophilic drugs. Their biodegradability, biocompatibility, non-immunogenic nature, and chemical stability make them superior to many conventional and lipid-based delivery systems. This review provides a comprehensive overview of niosomal drug delivery systems, focusing on their introduction, definition, structural organization, and essential components. Detailed discussion is presented on the types of niosomes based on size, lamellarity, and method of preparation. The mechanism of drug entrapment and release, along with the mechanism of action, is elaborated to explain their role in targeted and controlled drug delivery. Various methods of preparation such as thin-film hydration, ether injection, reverse-phase evaporation, and microfluidization are discussed, along with factors affecting niosome formation, including surfactant type, cholesterol content, hydration temperature, and drug characteristics. Furthermore, this review highlights the physicochemical characterization of niosomes, including vesicle size, zeta potential, entrapment efficiency, surface morphology. comparative evaluation between niosomes and liposomes is also presented to emphasize the advantages of niosomes in terms of stability, cost-effectiveness, and ease of large-scale production. The advantages and disadvantages of niosomal systems are critically analyzed, followed by a detailed discussion on their therapeutic applications in drug targeting, transdermal delivery, cancer therapy, vaccine delivery, ophthalmic formulations, and controlled release systems. Overall, niosomes represent a versatile and promising carrier system with immense potential in improving drug delivery and therapeutic efficacy.