The use of nanocarriers is an intriguing solution to increase the brain delivery of novel therapeutics. The aim of this paper was to use pharmacokinetic analysis and simulations to identify key factors that determine the effective drug concentration–time profile at the target site in the brain. Model building and simulations were based on experimental data obtained from the administration of the opioid peptide DAMGO in glutathione tagged PEGylated liposomes to rats. Different pharmacokinetic models were investigated to explore the mechanisms of increased brain delivery. Concentration–time profiles for a set of formulations with varying compound and carrier characteristics were simulated. By controlling the release rate from the liposome, the time profile and the extent of brain delivery can be regulated. The modeling did not support a mechanism of the liposomes passing the brain endothelial cell membrane in an intact form through endocytosis or transcytosis. The most likely process was found to be fusion of the liposome with the endothelial luminal membrane. The simulations revealed that low permeable compounds, independent on efflux, will gain the most from a nanocarrier formulation. The present model based approach is useful to explore and predict possibilities and limitations of carrier-based systems to the brain.