This study was designed to evaluate suitability of chitosan polymer as a vehicle for topical delivery system. Quercetin (QUT) is a natural flavonoid, was incorporated into the gel vehicles in a concentration of 0.5% w/v. Gels were prepared with three different concentrations and different molecular weights of chitosan. Viscosity, drug release from prepared gels, permeation of drug through skin rat and anti-inflammatory activity of the drug using carrageenan induced rat paw edema method were studied. In-vitro release characteristics of the drug from different gels were carried out using dialysis membrane in phosphate buffer, pH 5.5. The release data were treated with various kinetic principles to assess the relevant parameters. The general rank order of QUT release was F1 > F4 > F2 > F3 > F5. The results also showed that, the release of drug from the prepared gels obeyed the diffusion model (Higuchi’s equation). The results revealed an inverse correlation between the drug release percent and the polymer concentration used. The permeation of drug through skin rat was carried out. The flux of drug is independent on the viscosity of the formulae. The results also showed a significant anti-inflammatory activity on rat paw edema.