The current study was intended to investigate the comparative anti-depressant activity of Paroxetine-entrapped nanostructured lipid carriers (PAR-NLCs) and Paroxetine dispersion (PAR-Dispersion) in lipopolysaccharide (LPS) induced depression model. Previously prepared,  PAR-NLCs with the optimal acetyl alcohol to oleic acid ratio (76:24 w/w) was used in the study. To compare the release of PAR-NLCs with PAR dispersion, In vitro release was carried out in by dialysis membrane diffusion method. In addition, In vivo anti-depressant activity of PAR NLCs and PAR dispersion was assessed in LPS induced depression model in term of behavioral study and histopathological examination Hematoxylin & Eosin (H&E) staining. Furthermore, anti-oxidant levels (GSH, GST, and CAT) and TBARs were also assessed. The results showed biphasic drug release of PAR-NLCs with a burst release in the initial 2 hrs followed by sustained release upto 6 hrs. Behavioral studies depicted reduced immobility time in rats treated with PAR-NLCs. Furthermore, H & E staining exhibited an improved neuronal architecture and survival in PAR-NLCs group compared to PAR dispersion. The concentrations of anti-oxidants were also significantly increased in PAR-NLCS group. Taken together, therapeutic effectiveness of PAR was markedly augmented in PAR-NLCs and they could be potential Nano carriers for effective delivery of antidepressants to brain.