Liposomal carnosine could overcome the problems associated with direct application of this peptide. Anti-inflammatory and antioxidant effects of liposomal and non-liposomal carnosine in adjuvant arthritis were compared. The experiments were done on healthy animals, untreated arthritic animals, arthritic animals with oral administration of carnosine, and with subcutaneous administration of liposomal carnosine, both administered in the same daily dose of 150 mg/kg b.w. during 28 days. Carnosine reduced hind paw volume on day 28. Both forms markedly decreased interleukin-1β, matrix metalloproteinase-9 and monocyte chemoattractant protein-1 (MCP-1) in plasma on day 14. Only liposomal carnosine reduced significantly MCP-1. Malondialdehyde, 4-hydroxynonenal, resistance to Fe2+-induced oxidation and protein carbonyls were significantly corrected after administration of any form of carnosine. Liposomal carnosine corrected more effectively the oxidative stress in plasma than did carnosine. In brain tissue, our results showed protective ability of both forms of carnosine against oxidation of proteins and lipids. They also corrected the resistance to Fe2+-induced oxidation in arthritic animals. We found that only liposomal carnosine decreased the mRNA expression of inducible nitric oxide synthase in cartilage tissue. It can be concluded that the liposomal drug-delivery system is improving the pharmacological properties of carnosine administered in arthritis.