Topical drug delivery systems provide localized drug action. A hydrophilic polymer such as polyvinyl alcohol is a multi-faceted excipient that can be used as a coating agent, lubricant, stability enhancer and viscosity-increasing agent. The objective of our study was to evaluate the use of polyvinyl alcohol polymer in preparing a topical gel with a diclofenac salt as the pharmaceutical active. The gel was characterized for its rheological and other properties and its effectiveness to deliver drug through dermatomed human skin compared to a similar commercially available topical gel. Topical polyvinyl alcohol based gel was prepared with propylene glycol, isopropyl alcohol, hydroxypropyl cellulose, and Transcutol® P. Formulation was tested for pH, rheology, adhesion, spreadability, skin irritation, in vitro drug distribution in skin, and permeation. The formulated topical gel delivered an average cumulative drug amount of 22.85 ± 9.41 μg/cm2 across skin and delivered 10.30 ± 9.09 μg/cm2 in the skin over 24 h. The mean cell viability value of 107.41± 40.81% rendered by in vitro skin irritation test confirmed the formulated gel to be non-irritant to human skin. In conclusion, a safe efficacious and rheologically competent polyvinyl alcohol polymer based topical diclofenac gel was developed and characterized successfully.