Recent research into the complex and varied components of rheumatoid arthritis (RA) is leading to the development of more effective targets for pharmaceutical approach than even before. Current treatment of RA frequently includes the use of nonsteroidal anti-inflammatory drugs, such as Diclofenac sodium (DFNa) in spite of the severe adverse effects. Local application and incorporation of the drugs in liposome based formulations may reduce those side effects and improve the efficacy of drugs by reducing the availability of them in systemic circulation and increasing accumulation and retention time in the sites of inflammation. Herein, anti-inflammatory efficacy of the DFNa containing lipogelosome formulations (L1J1) was evaluated and found that L1J1 elicits a better anti-inflammatory efficacy after a single dose i.a administration in comparison with commercial product, VE-CP (R), which is used topically. Histopathological examination of the opened joints showed that joints treated with L1J1, had significantly (p < 0.05) lower scores than contra lateral control joints for inflammatory changes in the synovium. These results were also confirmed by biodistribution studies.