The purpose of this study was to formulate Cefaclor monohydrate (CEF) loaded microemulsion formulations with the help of pseudo-ternary phase diagrams for topical application. Additionally, in this study also a new ultra-performance liquid chromatography (UPLC) method was developed for the determination of CEF, which was not previously entered into the literature. The droplet size, polydispersity index, pH, rheology, drug content, FT-IR, dissolution study and release kinetic study have been used in the characterization of microemulsion. The UPLC method developed was validated for linearity, specificity, precision, sensitivity, accuracy, range and robustness. Linearity was determined to be at a concentration range of 5-55 mu g.mL(-1). The method developed was decided to be precise due to RSD values of <2%. Recovery of the method was satisfactory owing to <2%RSD value. The drug content was found to be in the range of 99.54-100.01% in stability study, indicating the uniformity of the high drug content. The release of CEF from microemulsion showed conformity with the zero-order kinetics. The droplet size of the formulations were measured ranged in 170.6-174.4 nm. The droplet size distribution of the formulations were observed range in 0.154-0.150. The results showed that nano-sized and monodisperse formulations were prepared. The storage stability of CEF loaded optimum microemulsion was followed to ICH Q1(R2) at 25 +/- 1 degrees C/60%+/- 5% relative humidity up to six-months. As a result of the stability study, microemulsion was found to be physically and chemically stable. According to the results, microemulsion formulation prepared have longer release times than the release of pure CEF.