Berberine (BBR) is the primary active component of Phellodendri Chinensis Cortex (PCC), which has been traditionally used to treat inflammatory diseases. However, the discrepancy between its low bioavailability and significant therapeutic effect remains obscure. The purpose of this study was to explore the previously unsolved enigma of the low bioavailability of BBR and its appreciable anti-inflammatory effect to reveal the action mechanism of BBR and PCC. The quantitative analysis of BBR and its metabolite oxyberberine (OBB) in blood and tissues was performed using high-performance liquid chromatography to investigate the conversion and distribution of BBR/OBB mediated by erythrocytes. Routine blood tests and immunohistochemical staining were used to explore the potential relationship between the amounts of monocyte/macrophage and the drug concentration in erythrocytes and tissues (liver, heart, spleen, lung, kidney, intestine, muscle, brain and pancreas). To comparatively explore the anti-inflammatory effects of BBR and OBB, the acetic acid-induced vascular permeability mice model and lipopolysaccharide-induced RAW 264.7 macrophages were employed. Nearly 92% of BBR existed in the erythrocytes in rats. The partition coefficient of BBR between plasma and erythrocytes (Kp/b) decreased with time. OBB was found to be the oxidative metabolite of BBR in erythrocytes. Proportion of BBR/OBB in erythrocytes changed from 9.38% to 16.30% and from 13.50% to 46.24%, respectively. There was a significant relationship between the BBR/OBB concentration in blood and monocyte depletion after a single administration of BBR. BBR/OBB was transported via erythrocytes to various tissues (liver, kidney, spleen, lung, and heart, etc), with the liver achieving the highest concentration. OBB exhibited similar anti-inflammatory effect in vitro and in vivo as BBR with much smaller dosage. BBR was prodominantly found in erythrocytes, which was critically participated in the biodistribution, pharmacokinetics, metabolism and target delivery of BBR and its metabolite. The anti-inflammatory activity of BBR and PCC was intimately associated with the metabolism into the active congener OBB and the targeted delivery to monocytes/macrophages mediated by the erythrocytes.