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In this study, an inflammation-targeted delivery system based on a liposomal carrier was developed to deliver hydrophobic dexamethasone against arthritis. Using two FDA-approved excipients for intravenous injection, dexamethasone loaded liposome (Dex-Lip) was prepared by a thin-film hydration method. The biodistribution of 1,1′-dioctadecyl-3,3,3′,3′-tetramethylindodicarbocyanine-loaded liposomes (DiD-Lips) were performed in rats with adjuvant-induced arthritis and demonstrated specific targeting efficacy in the disease site. DiD-Lips showed prolonged retention time in the inflammatory joint tissues compared with free DiD. Dex-Lips effectively suppressed the joint swelling in arthritis rats and significantly down-regulated serum pro-inflammatory cytokines including tumor necrosis factor-α and interleukin-1β when compared to free dexamethasone. Furthermore, Dex-Lips had no significantly impact on the body weight, alleviated the hyperglycemia and improved haematological profiles of rheumatoid arthritis rats during the treatment process. Taken together, a safe liposomal delivery system was developed to achieve inflammation targeted therapy against arthritis.