(1) Background: The present study aimed to prepare chitosan-coated nanoemulsion gel containing 5-fluorouracil for enhanced topical delivery. (2) Methods: To formulate the nanoemulsion gel, oleic acid was used as the oil phase and Carbopol 940 as a gelling agent. Chitosan was used as a coating agent to control the release of 5-FU. Drug–excipient compatibility was evaluated using ATR-FTIR. The prepared nanoemulsion formulations were characterized based on particle size distribution, zeta potential, % encapsulation efficiency and drug content. In vitro drug release, skin drug retention and ex vivo permeation profiles were performed across rat skin using a Franz diffusion cell. Skin irritation experiments were also conducted on rats to examine the irritation potential of the formulations. (3) Results: It was found that the drug and excipients were compatible and chitosan successfully coated 5-FU, as demonstrated by ATR-FTIR results. The introduction of chitosan increased the size and zeta potential of the nanoemulsion. The 5-FU release in vitro was significantly lowered in the case of chitosan-decorated nanoemulsion (5-FU-C-NE), whereas the permeation and skin drug retention were higher in the case of 5-FU-C-NE. The formulations were proven non-irritant to the skin of the rats. The optimized formulation of the nanoemulsion was introduced into 1% Carbopol 940 gel. Incorporating the nanoemulsion into the gel further reduced the drug release in vitro and ex vivo permeation, whereas the retention of the drug in the skin was significantly increased (ANOVA; p < 0.05). The increase in skin retention was due to the presence of chitosan and Carbopol 940. The in vitro and ex vivo results were also confirmed with in vivo studies. Incorporating nanoemulsion into gel has resulted in higher Tmax, longer half-life and greater skin drug retention. (4) Conclusion: The results suggest that chitosan-decorated nanoemulsion gel is safe and can potentially be used to promote 5-FU skin retention, which is ideal for skin diseases such as melanoma.