Topical photodynamic therapy (PDT) is a promising alternative for malignant skin diseases such as basal-cell carcinoma (BCC), due to its simplicity, enhanced patient compliance, and localization of the residual photosensitivity to the site of application. However, insufficient photosensitizer penetration into the skin is the major issue of concern with topical PDT. Therefore, the aim of the present study was to enable penetration of photosensitizer to the different strata of the skin using a lipid nanocarrier system. We have attempted to develop a nanostructured lipid carrier (NLC) for the topical delivery of second-generation photosensitizer, 5-amino levulinic acid (5-ALA), whose hydrophilicity and charge characteristic limit its percutaneous absorption. The microemulsion technique was used for preparing 5-ALA-loaded NLC. The mean particle size, polydispersity index, and entrapment efficiency of the optimized NLC of 5-ALA were found to be 185.2 ± 1.20, 0.156 ± 0.02, and 76.8 ± 2.58%, respectively. The results of in vitro release and in vitro skin permeation studies showed controlled drug release and enhanced penetration into the skin, respectively. Confocal laser scanning microscopy and cell line studies respectively demonstrated that encapsulation of 5-ALA in NLC enhanced its ability to reach deeper skin layers and consequently, increased cytotoxicity.