Lornoxicam (LRX) alleviates pain and inflammation associated with knee osteoarthritis (OAS). However, inadequate solubility, short half-life, and gastrointestinal side-effects on chronic use hinder the efficacy of LRX through oral route. Therefore, in present investigation, lornoxicam loaded nanostructured lipid carriers (LRX-NLCs) were scaled-up post optimization using hot homogenization method. The optimized F14 LRX-NLCs demonstrated particle size of 172.1 ± 2.0 nm with polydispersity index (PDI) of 0.293 ± 0.01, zeta (ζ) potential of −15.5 ± 1.21 mV, entrapment efficiency of 92.85 ± 0.25 % and drug release up to 18.9 ± 1.8 % at 3 h in addition to sustained release pattern throughout 24 h. Later, F14 LRX-NLCs were amalgamated with carbopol 940 LR gel as LRX-NLCs-Gel and evaluated for pH, spreadability, drug content, rheological behavior, texture properties, ex-vivo skin permeation and retention, and dermal distribution. Furthermore, pharmacodynamic studies of LRX-NLCs-Gel disclosed a substantial diminution in pain and inflammation in addition to amended radiographic and histopathological features in monosodium iodoacetate (MIA) induced OAS in Sprague Dawley rats. LRX-NLCs-Gel exhibited a remarkable decline in the levels of pro-inflammatory cytokines such as IL-1β, TNF-α, in addition to COX-2 in knee OAS. LRX-NLCs-Gel presented an epochal decrease in synovial hyperplasia, inflammation, and ameliorated cartilage structure. In addition, omega-3, omega-6, and omega-9 fatty acids enriched emu oil might have assisted in offering synergistic activity with LRX in cartilage repairing due to suppression of the proteolytic activity of MMP-2 and MMP-9. In conclusion, LRX-NLCs-Gel may be a prospective candidate for translating the product in to a clinically viable dosage form.