In previous studies we reported that the permeation of dexamethasone and hydrocortisone across the skin was decreased and penetration into the skin was increased in the presence of Transcutol® (TC) when compared to water as a solvent. The objective of this investigation was to study the effect of TC on the binding of dexamethasone and hydrocortisone to the skin, and on the accumulation and retention in the skin. Adsorption and desorption studies were conducted for dexamethasone and hydrocortisone with full thickness skin (FTS), and epidermis.The amount of dexamethasone and hydrocortisone adsorbed and desorbed with FTS and epidermis was essentially the same. In the presence of TC the amount of dexamethasone and hydrocortisone adsorbed was increased by 100% with both FTS and epidermis, whereas there was no difference in the amount of dexamethasone and hydrocortisone desorbed. A topical delivery system was developed with and without TC and was evaluated in vivo using the rat as an animal model for hydrocortisone accumulation after multiple dosing. The systemic body burden was reduced by 70% and skin retention of hydrocortisone was incresed by 100% in all the layers of the skin. The detection of hydrocortisone accumulation and retention were studied by autoradiography and electron microscopy, and the results support the hydrocortisone depot in the skin due to TC.