This work aims to evaluate the encapsulation of a flavonoid-rich Allium cepa L. var. agrogatum Don extract (ACADFE) in β-cyclodextrin (β-CD) by analyzing the percutaneous penetration in vitro and in vivo, leading to an explanation of the physical mechanism during transdermal transport. The optimal inclusion compound containing ACADFE in β-CD was prepared in a 1:3 molar ratio. The physicochemical characterization of the inclusion complex was performed using IR, UV-vis, simultaneous thermogravimetry (TG), and differential thermal analysis (DTA) studies. It was concluded that the inclusion complex could improve the aqueous solubility and bioavailability of ACADFE. The inclusion complex exhibited significant enhancement of percutaneous absorption both in vitro and in vivo. The dorsal skins of hairless mice were photographed using a confocal scanning laser microscope. Confocal scanning laser microscopy shows that penetration of the ACADFE-β-CD inclusion complex proceeds across skin via both follicular and transcellular routes.