Systemic drug delivery in schizophrenia is a major challenge due to presence of obstacles like, blood-brain barrier and P-glycoprotein, which prohibit entry of drugs into the brain. Quetiapine fumarate (QF), a substrate to P-glycoprotein under goes extensive first pass metabolism leading to limited absorption thus necessitating frequent oral administration. The aim of this study was to develop QF based microemulsion (ME) with and without chitosan (CH) to investigate its potential use in improving the bioavailability and brain targeting efficiency following non-invasive intranasal administration. QF loaded ME and mucoadhesive ME (MME) showed globule size, pH and viscosity in the range of 29–47 nm, 5.5–6.5 and 17–40 cP respectively. CH-ME with spherical globules having mean size of 35.31 ± 1.71 nm, pH value of 5.61 ± 0.16 showed highest ex-vivo nasal diffusion (78.26 ± 3.29%) in 8 h with no sign of structural damage upon histopathological examination. Circular plume with an ovality ratio closer to 1.3 for CH-ME depicted ideal spray pattern. Significantly higher brain/blood ratio of CH-ME in comparison to QF-ME and drug solution following intranasal administration revealed prolonged retention of QF at site of action suggesting superiority of CH as permeability enhancer. Following intranasal administration, 2.7 and 3.8 folds higher nasal bioavailability in brain with CH-ME compared to QF-ME and drug solution respectively is indicative of preferential nose to brain transport (80.51 ± 6.46%) bypassing blood-brain barrier. Overall, the above finding shows promising results in the area of developing non-invasive intranasal route as an alternative to oral route for brain delivery.