Dutasteride, used for treating benign prostate hyperplasia (BPH), promotes hair growth. To enhance delivery to the hair follicles and reduce systemic effects, in this study dutasteride has been formulated for topical application, in a nanostructured lipid carrier (NLC) coated with chitosan oligomer-stearic acid (CSO-SA). CSO-SA has been successfully synthesized, as confirmed using 1H NMR and FTIR. Formulation of dutasteride-loaded nanostructured lipid carriers (DST-NLCs) was optimized using a 23 full factorial design. This formulation was coated with different concentrations of stearic acid-chitosan solution. Coating DST-NLCs with 5% SA-CSO increased mean size from 187.6 ± 7.0 nm to 220.1 ± 11.9 nm, and modified surface charge, with zeta potentials being −18.3 ± 0.9 mV and +25.8 ± 1.1 mV for uncoated and coated DST-NLCs respectively. Transmission electron microscopy showed all formulations comprised approximately spherical particles. DST-NLCs, coated and uncoated with CSO-SA, exhibited particle size stability over 60 days, when stored at 4–8 °C. However, NLCs coated with CSO (without conjugation) showed aggregation when stored at 4–8 °C after 30 days. The measured particle size for all formulations stored at 25 °C suggested aggregation, which was greatest for DST-NLCs coated with 10% CSO-SA and 5% CSO. All nanoparticle formulations exhibited rapid release in an in vitro release study, with uncoated NLCs exhibiting the fastest release rate. Using a Franz diffusion cell, no dutasteride permeated through pig ear skin after 48 h, such that it was not detected in the receptor chamber for all samples. The amount of dutasteride in the skin was significantly different (p < 0.05) for DST-NLCs (6.09 ± 1.09 μg/cm2) without coating and those coated with 5% CSO-SA (2.82 ± 0.40 μg/cm2), 10% CSO-SA (2.70 ± 0.35 μg/cm2) and CSO (2.11 ± 0.64 μg/cm2). There was a significant difference (p < 0.05) in the cytotoxicity (IC50) between dutasteride alone and in the nanoparticles. DST-NLCs coated and uncoated with CSO-SA increased the maximum non-toxic concentration by 20-fold compared to dutasteride alone. These studies indicate that a stearic acid-chitosan conjugate was successfully prepared, and modified the surface charge of DST-NLCs from negative to positive. These stable, less cytotoxic, positively-charged dutasteride-loaded nanostructured lipid carriers, with stearic acid-chitosan oligomer conjugate, are appropriate for topical delivery and have potential for promotion of hair growth.