Purpose: alpha-Melanocyte-stimulating hormone (alpha-MSH) is an endogenous peptide hormone with anti-inflammatory responses. We developed topical formulation(s) of alpha-MSH to reduce psoriasis-related inflammation. Methods: Transcutol (TC) and n-methyl 2-pyrrolidone (NMP) were used to formulate a gel for alpha-MSH. Skin permeation and dermal microdialysis of the solution and optimized gel were performed. The inflammatory response of alpha-MSH gel was investigated in imiquimod-induced psoriasis mouse model. Histology and immunohistochemistry were then performed on treated skin. Results: Solution comprising 50%w/w TC and 10%w/w NMP showed higher (p<0.05) skin retention (0.27 +/- 0.024 mu g of alpha-MSH/mg of skin) than solutions containing either 50%w/w TC or 10%w/w NMP at 24 h. Dispersion of alpha-MSH in Carbopol Ultrez 10 produced a uniform dispersion. alpha-MSH gel showed pseudoplastic flow with thixotropic behavior. Dermal microdialysis results suggested that skin permeation of gel after 5 h was 1.9-folds higher than the solution. Further, gel-treated psoriatic-like plaque skin sections showed significant (p<0.05) decrease in the expression of a melanocortin receptor, in the psoriasis area and severity index score and transepidermal water loss compared to the solution. Conclusion: TC, NMP and Carbopol Ultrez 10 form a stable gel with improved skin permeation of alpha-MSH for a reduction in psoriasis-associated inflammation.