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Psoriasis is a long-term inflammatory skin condition that is immune-mediated and involves hyperproliferation of the keratinocyte, leading to an uncontrolled immune response. First-line treatments for psoriasis may include systemic conventional therapies, phototherapy, or topical therapies. Often with traditional therapies, limitations can arise, which include restricted penetration of the agent into the skin, systemic side effects and low patient adherence. New drug delivery systems are being researched and formulated using novel formulation strategies and nanotechnology to address existing limitations and enhance therapeutic efficacy. Advanced drug delivery formulations such as liposomes, nano emulsions, solid lipid nanoparticles, or ethosomes can enhance the solubility of drugs, facilitate targeted delivery, and allow for extended release. These nanocarriers enhance skin penetration, reduce systemic toxicity, and enable co-delivery of synthetic drugs and natural bioactives with increased therapeutic flexibility. The complementarity of nanotechnology with current formulation methods has the possibility of addressing both the pathophysiological complexities of psoriasis and the implementation of individualized treatment plans. This review has presented the innovations, mechanisms of action, and clinical implications of nanotechnology-based formulations with respect to the treatment of psoriasis. The implications of the evidence presented indicate that several innovative systems could vastly improve dermatologic care and quality of life for patients.