The aim of this study was to synthesize folate-dendrimer conjugates as suitable vehicle for site specific delivery of anti-arthritic drug (indomethacin) to inflammatory regions and to determine its targeting efficiency, biodistribution in adjuvant induced arthritic rats. Folic acid was coupled to the surface amino groups of G4-PAMAM dendrimer (G4D) via a carbodiimide reaction and loaded with indomethacin. The conjugates were characterized by (1)H-NMR and IR spectroscopy. The drug content and percent encapsulation efficiency increased with increasing folate content for the dendrimer conjugates. The in vitro release rate was decreased for the folate conjugates when compared with unconjugated dendrimer (DNI). The plasma concentration profile showed a biphasic curve indicating rapid distribution followed by slow elimination. The AUC(0-infinity), half-life and residence time of indomethacin in inflamed paw was higher for folate-dendrimer conjugates. The time-averaged relative drug exposure (r(e)) of the drug in paw and overall drug targeting efficiency (T(e)) were higher for folate conjugate with 21 folate moieties (4.1 and 2.78, respectively) when compared with DNI (1.91 and 1.88, respectively). This study demonstrated the superiority of active targeting over dendrimer mediated passive targeting and also for the first time, folate-mediated targeting of an anti-arthritic drug to the inflammatory tissues.