The present study was performed in order to establish the efficacy of Kalpaamruthaa (KA), a modified indigenous Siddha preparation in adjuvant induced arthritic rat (AIA) model with reference to mediators of inflammation (lysosomal enzymes) and its effect on proteoglycans. Albino rats of Wistar strain were divided into seven Groups of six animals each. Arthritis was induced to rats by subcutaneous injection of 0.1 ml of Complete Freund's Adjuvant into the plantar surface of the left hind paw. Group I served as normal control rats receiving 0.5 ml of olive oil as vehicle, Group II arthritic rats served as induced-untreated and Group III (50 mg/kg), Group IV (100 mg/kg), Group V (150 mg/kg), Group VI (200 mg/kg) and Group VII (250 mg/kg) were KA treated rats at different dose levels orally in 0.5 ml of olive oil from 14(th) day of adjuvant injection and was terminated on day 28. Animals were then sacrificed on the day 29, blood was collected, liver and kidney were dissected out, washed and 10% homogenates were prepared. The activities of lysosomal enzymes (beta-glucuronidase, beta-galactosidase, acid phosphatase, beta-N-acetyl glucosaminidase and cathepsin-D), aminotransferases (alkaline phosphatase, aspartate and aminotransferases) and levels of plasma protein bound carbohydrate components of glycoproteins were determined and were found to be elevated in arthritic rats when compared to control animals. After administration of KA, the activities of lysosomal enzymes, aminotransferases and protein-bound carbohydrate component levels were significantly normalized. The data obtained evidently indicate that Kalpaamruthaa is effective at the dose of 150 mg/kg b.wt. in AIA and plays an important role in lysosomal membrane stabilization. This was further confirmed by radiological, histological and electron microscopic studies.