Rheumatoid arthritis (RA) is one of the most common autoimmune diseases. Carvacrol, an important natural terpenoid product in aromatic plants such as thyme, has shown anti-inflammatory effects in animal models of arthritis. However, its poor water solubility and high volatility have limited its application. In the present study in order to overcome this problem, we encapsulated carvacrol in the bovine serum albumin (BSA) nanoparticles and examined its therapeutic and immunomodulatory effects in adjuvant-induced arthritis (AIA). Carvacrol-loaded BSA nanoparticles were prepared by desolvation method. Nanoparticles had encapsulation efficiency (EE) of 67.7±6.9% and loading capacity (LC) of 26.6±2%. The size of particles was 148±25 nm and they had monomodal distribution. After arthritis induction, the rats were treated intraperitoneally with nanoparticle for every 3 days until day 28. The treatment of the rats with 375 mg/mL carvacrol-loaded BSA nanoparticle significantly decreased clinical severity score (27.5±9.8%, p= 0.008), erythrocyte sedimentation rate (33.4±10%, p= 0.02), nitric oxide production (82.3±2.6%, p= 0.004) and interleukin (IL)-17 gene expression (55.1±8.2%, p= 0.003) compared to the untreated arthritic group. A higher reduction in inflammation severity in arthritic rats treated with carvacrol-loaded BSA in comparison to those treated with carvacrol alone was observed. In conclusion, encapsulation of carvacrol in nanoparticles reduced arthritis signs and release of NO and IL-17 inflammatory cytokine and therefore is suggested to be considered as a good approach for improving the therapeutic applications of carvacrol in RA.