<p>Psoriasis is a chronic inflammatory skin condition characterized by the hyperproliferation of keratinocytes that results in erythematous and scaly plaques on the epidermal surface. Conventional therapeutic approaches exhibit drawbacks such as inadequate skin penetration, low drug bioavailability, and undesirable side effects. Nanoformulations emerge as a novel strategy to enhance drug delivery for treating psoriatic lesions with modified cyclodextrins (CDs), offering significant potential to improve their efficacy in the field of medicine. Cyclodextrins are well-known as versatile excipients that improve solubility, dissolution rate, chemical stability, and bioavailability through the formation of inclusion complexes. Furthermore, the chemical modifications of cyclodextrins such as sulfation, methylation, and hydroxypropylation have further enhanced their utility in topical formulations. Modified cyclodextrins enhance the delivery of anti-psoriatic agents such as TNF-α or IL-17 inhibitors and target key inflammatory pathways in psoriasis while reducing systemic exposure and minimizing side effects like immunosuppression, infections, and gastrointestinal disturbances. Additionally, modified cyclodextrins help to repair the epidermal barrier by increasing the efficacy of anti-inflammatory and keratinocyte-modulating medications. This article highlights the capabilities of modified cyclodextrins for revolutionizing the transformation of more effective and targeted therapies for psoriasis by identifying the limitations of current therapies and exploring the innovative applications of modified cyclodextrins in nanoformulations.</p> Graphical Abstract <p></p>