Nonionic surfactant vesicles (niosomes) have drawn a lot of attention in the area of modern drug delivery systems due to their salient features such as biodegradability, biocompatibility, chemical stability, low production cost, easy storage and handling and low toxicity. Niosomes are hydrated vesicular systems having a lamellar bilayer structure formed from nonionic surfactants with or without cholesterol and they are capable of encapsulating bioactive compounds with a wide range of solubility. Niosomes have been evaluated as a carrier for delivery of a number of anti-cancer drugs, genes, antigens and other bioactive compounds. Niosomal systems offer advantages over conventional delivery systems via delivering the bioactives in a controlled/sustained manner and delivering the actives to the target site. Niosomes tackle the problem of insolubility, instability, low bioavailability and rapid degradation of drugs. This paper overviews the general advantages of niosomal systems along with their potential applications in pharmaceutical areas. This article also highlights the effect of niosomal formulation on the physicochemical properties of niosomal systems. Various techniques of preparation are detailed and some down-sizing approaches have been identified.