Background: Peripheral opioid receptor targeting has been well established as a novel target in clinical pain management for acute and chronic peripheral inflammatory pain. The physiochemical properties of the peripheral mu-opioid receptor agonist, loperamide HCl, limit the use of the free drug as an analgesic or anti-inflammatory agent, particularly for dermal delivery across intact skin. Objective: Our objective was to manufacture an effective topical formulation containing loperamide using liposomal delivery that would allow loperamide to produce analgesia and anti-inflammatory effects, by penetrating the epidermis to reach peripheral opioid receptors within the dermis of intact skin. Study Design: A randomized, double blind, controlled animal trial. Methods: Thirty-five adult male Wistar rats (200 – 250 g) were randomly divided into 5 groups: loperamide HCl-encapsulated liposomal gel, naloxone methiodide + loperamide HCl-encapsulated liposomal gel, free loperamide gel, empty liposomal gel, and 1% diclofenac gel (Voltaren®). Diclofenac gel was used as a positive control as it is clinically used as a topical analgesic and anti-inflammatory drug. Animals received an intraplantar injection of 150 µl Complete Freund’s Adjuvant (CFA) into the right hindpaw and experiments were performed 5 days post-CFA injection, which corresponded to the peak inflammatory response. All manufactured formulations were applied topically on both hind paws twice daily, whereas Voltaren gel was applied 3 times a day in accordance with the manufacturer’s instructions. The dose administered was 50 µl, which equated to 0.4 mg of loperamide HCl for the loperamide HCl treatment groups (low dose). Naloxone methiodide (1 mg/kg) was administered via intraplantar injection, 15 minutes prior to application of loperamide HCl-encapsulated liposomal gel to determine opioid receptor dependent activity. An investigator blinded to the treatment administered assessed time course of the antinociceptive and antiinflammatory effects using a paw pressure analgesiometer and plethysmometer, respectively. Results: Application of loperamide HCl in a liposomal gel formulation exerted analgesic and antiinflammatory effects exclusively in peripheral painful inflamed tissue. This formulation produced highly significant analgesic and anti-inflammatory effects over the 48-hour time course studied following topical administration in rats with CFA-induced inflammation of the paw. As expected, the diclofenac gel group showed significant antinociception over the duration of the study; however, this effect was lower in comparison to the loperamide HCl liposomal gel formulation. All other control groups showed no significant antinociceptive effects. In addition, all control groups (1% diclofenac gel, free loperamide gel, and empty liposomal gel) did not demonstrate a significant change in paw volume over 48 hours. Limitations: In vivo studies were performed in the well-established rodent model of acute inflammatory pain. We are currently studying this approach in chronic pain models known to have clinical activation of the peripheral immune-derived opioid response. Conclusions: The study demonstrates that topically applied loperamide encapsulated within liposomal systems has improved therapeutic efficacy over conventional formulations for the local treatment of acute peripheral inflammatory pain conditions where the skin has remained intact. Once in the inflamed peripheral tissue, loperamide provides analgesic and anti-inflammatory effects in a similar manner to peripheral endogenous opioids. This preparation optimises the retention of drug at the site where action is required. Key words: Pain, inflammation, opioids, loperamide, liposomes, topical drug delivery, peripheral opioid receptors