Periodontitis is a local inflammatory disease initiated by bacteria accumulation and results in cytokine mediated alveolar bone resorption and tissue destruction. In this study, the effect of locally delivered atorvastatin (2% w/v) containing chitosan formulations in the treatment of periodontitis was evaluated in rats with ligature induced periodontitis. The levels of interleukin-1beta (IL-1β), IL-6, IL-8, IL-10, transforming growth factor-β1 (TGF-β1), TGF-β2 and TGF-β3 were measured after treatment with formulations. Histomorphometric analysis included the measurements of the area of alveolar bone and the distance between cemento-enamel junction (CEJ) and connective tissue attachment to tooth. Inflammatory and osteoclastic activity scores were given semiquantitatively. Following the administration of atorvastatin, release of pro-inflammatory (IL-1β, IL-6 and IL-8) and anti-inflammatory (TGF-β1 and TGF-β2) cytokines was found to decrease, with a significant alveolar bone healing, when compared to that of control. The anti-inflammatory effect was observed to enhance in presence of chitosan. These findings suggest that chitosan based delivery system for a statin group drug, atorvastatin is a promising for the treatment of periodontal disease.