Inflammatory cell infiltration, particularly macrophages, plays a major contribution to the pathogenesis of Rheumatoid Arthritis (RA). Exploiting the overexpression of folate receptors (FR-β) on these recruited macrophages has gained significant attraction for ligand-targeted delivery. Leflunomide (LEF), being an immunomodulatory agent is considered the cornerstone of the therapy, however, its oral efficacy is impeded by low solubility and escalating adverse effects profile. Therefore, in the present work, we developed Folate-conjugated chitosan-chondroitin sulfate nanoparticles encapsulating LEF for selective targeting at inflammatory sites in RA. For this purpose, the folate group was first conjugated with the chitosan polymer. After which, Folate Leflunomide Nanoparticles (FA-LEF-NPs) were synthesized through the ionotropic gelation method by employing FA-CHI and CHS. The polymers CHI and CHS were also presented with innate anti-inflammatory and anti-rheumatic attributes that were helpful in provision of synergistic effects to the formulation. These nanoparticles were further fabricated into a hydrogel, employing almond oil (A.O) as a permeation enhancer. The in vivo studies justified the preferential accumulation of FA-conjugated nanoparticles at inflamed joints more than any other organ in comparison to the free LEF and LEF-NPs formulation. The FA-LEF-NPs loaded hydrogel also ascertained a minimal adverse effect profile with an improvement of inflammatory cytokines expression.