Background: Systemic treatment of rheumatoid arthritis has been accompanied with several side effects. This study attempts to reduce leflunomide systemic side effects besides increasing its joint healing outcomes via formulation of layer-by-layer coated, leflunomide-loaded solid lipid nanoparticles (SLNs). Methods: SLNs were coated with chitosan (CS) followed by folic acid (FA). FA-CS-SLNs were about 284.9 nm and carried negative surface charge. Results & conclusion: FA-CS-SLNs showed sustained release profile for 168 h. Results of oral administration of FA-CS-SLNs in rats with adjuvant-induced arthritis revealed improved joint healing and reduced hepatotoxicity compared with leflunomide suspension. This may be attributed to the ability of FA-CS-SLNs to actively target FA receptors that are overexpressed in inflamed rheumatic joints in addition to innate joint healing properties of CS.