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Purpose: Formulate phospho-sulindac (P-S, OXT-328) in a Pluronic hydrogel to be used as a topical anti-inflammatory agent and study its efficacy, safety and pharmacokinetics in an arthritis model. Methods: LEW/crlBR rats with Freund's adjuvant-induced arthritis were treated with P-S formulated in Pluronic hydrogel (PSH). We determined the clinical manifestations of arthritis including the locomotor activity of the rats; evaluated joints for inflammation, bone resorption, cartilage damage, COX-2 expression and NF-κB activation; assayed plasma IL-6 and IL-10 levels; and studied the pharmacokinetics of P-S in rats after topical or oral administration. Results: PSH applied at the onset of arthritis or when arthritis was fully developed, suppressed it by 56-82%, improved the locomotor activity of the rats 2.1-4.4 fold, suppressed synovial inflammation, bone resorption, cartilage damage, NF-κB activation and COX-2 expression but not plasma IL-6 and IL-10 levels. There were no side effects. PSH produced rapidly high local levels of P-S with <14% of P-S reaching the circulation, while orally administered P-S was rapidly metabolized generating much lower joint levels of P-S. Conclusions: Topical application of PSH is efficacious and safe in the treatment of Freund's adjuvant-induced arthritis; has a favorable pharmacokinetic profile; and likely acts by suppressing key pro-inflammatory signaling pathways. [ABSTRACT FROM AUTHOR]