Rheumatoid arthritis (RA) is a chronic debilitating disease affecting over 1% of Americans. Women are affected about 3 times more often than men. RA also constitutes a major health problem among the U.S. Veterans. The Veteran population is aging, and the number of women serving in the military is gradually increasing. In addition, military personnel in combat zones are exposed to extreme stress and toxic substances in different forms. All these factors may directly or indirectly influence host immunity and induction/aggravation of RA. The pain, discomfort, lost working days, and disabilities caused by RA can adversely affect Veterans’ quality of life in many ways, as well as impose heavy cost of healthcare and rehabilitation. Therefore, studies advancing new modalities of treatment of RA are highly relevant to the U.S. Veterans. Using the rat adjuvant-induced arthritis (AA) model of human RA, we developed a peptide-guided targeted liposomal drug delivery system for arthritis therapy. For this purpose, we used a novel joint-homing peptide ART-2 to guide liposomes entrapping dexamethasone (DEX) to arthritic joints of rats. Peptide-guided liposomal DEX was more effective in suppressing arthritis in rats than untargeted liposomal drug or free drug. Importantly, the increased efficacy of the ART-2 liposomal group was not associated with concurrent increase in systemic toxicity. Thus, peptide- guided liposomal drug delivery improved the therapeutic profile (benefit/risk ratio) of DEX over the other two modalities. However, unlike inbred rats (used in the rat AA model), which are genetically homogeneous (same) and generate immune response mainly to heat-shock protein 65 (Hsp65), RA patients have diverse genetic make-up and generate immune response to both Hsp65 and type II collagen (CII). Therefore, we need to validate our current findings from the rat AA model in an independent second model, the mouse collagen- induced arthritis (CIA) model, which differs in genetics and certain disease parameters from the AA model. This validation will be the first step to de-risk the translational application of this technology to RA patients before undertaking further development and evaluation to meet the criteria of an investigational new drug (IND) for the FDA. This is significant because the Veterans Affairs (VA) has filed a non-provisional patent on the use of peptide ART-2 for arthritis therapy with the U.S. Patent and Trademark Office. The AA and CIA models of arthritis share some (but not all) features with human RA, but they also differ in a few critical characteristics: 1) unlike Lewis rats (RT-1l), inbred wild type mice do not develop AA; 2) the predominant target of the T cells/antibodies is CII in CIA, but Hsp65 in AA; 3) antibodies are pathogenic in CIA, but either show no effect or are protective in AA; and 4) drug metabolism is different in rats and mice. We will use two CIA models: wild type DBA/1 (H-2q) mice and “humanized” mice (H-2b) expressing H...