Lipophilicity vs hydrophicility physicochemical traits are extremely important variables that are active considerations for optimizing drug delivery systems. The comparative anti-inflammatory delivery potential of dexamethasone (dex) in an encapsulation-based (liposome-lipophilic) and poly (amidoamine) (PAMAM) dendrimer prodrug conjugation-based delivery systems (hydrophilic) was performed in this work. Dendrimer prodrug conjugates were characterized by 1H NMR. The drug encapsulation efficiency for drug in liposomes was observed to be 14.02% and this was correlated with a dose-dependent tumor necrosis factor (TNF)-α inhibition (39-57% inhibition). The biological evaluation of nanocarriers for drug was demonstrated in a standard, conventionally used in vitro cell-based system for TNF-α inhibition. This served as a comparative tool to demonstrate a quantitatively higher TNF-α inhibition (67-71.48%) produced by the dendrimer-dex drug conjugate. The structure activity relationship (dose-for-dose) was inferred by relatively lesser inhibition of TNF-α by variants of PAMAM G4 (NH2) dendrimer-dex conjugates and was compared with liposomes carrying dex. In vitro results suggest that the prodrug conjugates of PAMAM dendrimer deliver dex to be more efficient in comparison with liposome-based dex in terms of higher TNF-α inhibition. This study has implications in designing efficient prodrug nanocarrier systems for delivering dex. © 2013 Elsevier B.V. All rights reserved.