Background: Psoriatic arthritis (PsA), a chronic inflammatory disease, mainly affects the joints, with approximately 30% of psoriasis patients eventually developing PsA. Characterized by both innate and adaptive immune responses, PsA poses significant challenges for effective treatment. Recent advances in drug delivery systems have sparked interest in developing novel formulations to improve therapeutic outcomes. The current research focuses on the development and evaluation of a nanosponge-loaded, cyclo-oxygenase-2 (COX-2) inhibitor-based topical gel for the treatment of PsA. Methods: Nanosponges (NSs) were prepared by using beta-cyclodextrin as a polymer and dimethyl carbonate (DMC) as a crosslinker by melting, and gels were prepared by employing carbopol and badam gum as polymers. Results: Solubility studies confirmed that the prepared nanosponges were highly soluble. FT-IR studies confirmed the formation of hydrogen bonds between lumiracoxib and beta-cyclodextrin. SEM confirmed that the prepared formulations were roughly spherical and porous in nature. The average particle size was 190.5 ± 0.02 nm, with a zeta potential of −18.9 mv. XRD studies showed that the crystallinity of lumiracoxib decreased after encapsulation, which helped to increase its solubility. The optimized nanosponges (NS2) were incorporated in an optimized gel (FG10) to formulate a nanosponge-loaded topical gel. The optimized gel formulation exhibited a homogeneous consistency, with a pH of 6.8 and a viscosity of 1.15 PaS, indicating its suitability for topical application and stability. The in vitro diffusion studies for the topical gel showed drug release of 82.32% in 24 h. The optimized formulation demonstrated significant antipsoriatic activity, as confirmed through cytotoxicity studies conducted on HaCaT cells. Conclusions: On the basis of the findings, it can be concluded that the prepared nanosponge-loaded topical gel formulation presents a promising solution for the effective management of PsA, offering enhanced drug solubility, sustained release, and improved therapeutic potential.