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The present paper discusses the design, characterization and in vivo evaluation of glyceryl monostearate nanoparticles of Olanzapine, an atypical antipsychotic drug for acute schizophrenia treatment, during which hospitalization is mandatory and adverse effects are at its peak. The solid lipid nanoparticulate system was obtained by emulsification-ultra sonication technique wherein three factors such as solid lipid content, concentration of surfactant and drug: solid lipid ratio were selected at three different levels in order to study their influence on significant characteristic responses such as particle size, encapsulation efficiency and drug content.A Box Behnken design with 17 runs involving whole factors at three levels was employed for the study. The optimized formulation was further coated with Polysorbate 80 in order to enhance its brain targeting potential through endocytosis transport process via blood brain barrier. The designed formulations were pre-clinically tested successfully in Wistar rat model for in vivo antipsychotic efficacy (apomorphine induced psychosis) and adverse effects (weight gain study for 28 days).The results obtained indicated that solid lipid nanoparticles had very narrow size distribution (151.29 ± 3.36 nm) with very high encapsulation efficiency (74.51 ± 1.75%). Morphological studies by SEM have shown that solid lipid nanoparticles were spherical in shape with smooth surface. Olanzapine-loaded nanoparticles prepared from solid lipid, extended the release of drug for 48 h, as found by the in vitro release studies. The formulations also exhibited high redispersibility after freeze-drying and stability study results demonstrated good stability, with no significant change for a period of 6 months. In vivo evaluation and adverse effects studies of Olanzapine-loaded nanoparticulate systems in animal model have demonstrated an improved therapeutic efficacy than pure Olanzapine. The antipsychotic effect of drug loaded nanoparticulate systems was maintained for 48 h as compared to 8 h antipsychotic action of pure Olanzapine solution. The weight gain studies for 28 days demonstrated a significant inhibition in weight gain for Olanzapine-loaded nanoparticulate systems as compared to the pure Olanzapine. The present research findings indicate that OLN-loaded nanoparticulate systems may be highly promising for effective delivery of Olanzapine with better efficacy and minimum adverse effects.