The development could help millions of men every year.
Current erectile dysfunction drugs, called phosphodiesterase type 5 (PDE5) inhibitors, can cause side effects, ranging from headaches and vision problems to more serious complications.
Men who have suffered a heart attack or a stroke are warned to be cautious when they take the medication, while an estimated one in three men find that the drugs do not work.
Doctors have now developed a new way of minimising side effects by delivering drugs directly to the affected area using tiny particles, smaller than the size of pollen grains.
Tests on rats have shown that the drugs are effective in nine out of 10 cases.
The researchers behind the breakthrough now say that they plan to test the mediation on humans, but warn it could be another 10 years before the product is on the market.
The team, at Albert Einstein College of Medicine of Yeshiva University, New York, said that other attempts at administering drugs through the skin had not been very successful.
Kelvin P. Davies, associate professor of urology and one of the co-authors of the study, added: "The response time to the nanoparticles was very short, just a few minutes, which is basically what people want in an Erectile Dysfunction medication.
"In both rats and humans, it can take 30 minutes to one hour for oral ED medications to take effect."
The findings were published online in the Journal of Sexual Medicine.
