Purpose: To investigate the efficacy and safety of N-(2-hydroxypropyl) methacrylamide (HPMA) copolymer-dexamethasone conjugate (P-Dex) in the collagen-induced arthritis (CIA) mouse model. Methods: HPMA copolymer labeled with a near infrared fluorescence (NIRF) dye was administered to mice with CIA to validate its passive targeting to inflamed joints and utility as a drug carrier system. The CIA mice were treated with P-Dex, dexamethasone (Dex) or saline and the therapeutic efficacy and skeletal toxicity evaluated using clinical scoring and micro-computed tomography (μ-CT). Results: The NIRF signal of the HPMA copolymer localized to arthritic joints consistent with its passive targeting to sites of inflammation. While the CIA mice responded more rapidly to P-Dex compared to Dex, the final clinical score and endpoint μ-CT analyses of localized bone erosions indicated that both single dose P-Dex and dose equivalent daily Dex led to comparable clinical efficacy after 30 days. μ-CT analysis of the proximal tibial metaphyses showed that P-Dex treatment was associated with significantly higher BMD and BV/TV compared to Dex and the saline control, consistent with reduced glucocorticoid (GC) skeletal toxicity. Conclusion: These results validate the therapeutic efficacy of P-Dex in the CIA mouse model. P-Dex treatment averted the adverse effects of GC's on systemic bone loss, supporting its utility in clinical development for the management of rheumatoid arthritis.