The present study was aimed to assess the effect of Bacopa monniera extract against lysosomal instability during adjuvant-induced arthritis in rats. B. monniera extract was administered orally at a dose of 100 mg/kg body weight for 30 days to the experimental rats after the induction of adjuvant arthritis. The ability of B. monniera extract to stabilize lysosomal enzyme activities in the cartilage of control and experimental rats was done by monitoring the activities of pathophysiological enzymes such as β-glucuronidase, β-glucosaminidase, cathepsin D, hyaluronidase, collagenase and the level of protein bound carbohydrates and glycosaminoglycans (GAGs) in arthritic rats. B. monniera extract supplementation significantly inhibited lysosomal instability in different tissues studies and improved the level of glycoproteins in synovial effusate and GAG in the cartilage. To evaluate whether anti-inflammatory property of B. monniera extract was due to lysosomal stability and GAG protection, purified chloroform fraction of B. monniera (CF) was assayed for its role to modulate interleukin-6 (IL-6) expression and prostaglandin E2 (PGE2) production. Administration of CF (50 mg/kg) to arthritic rats significantly downregulated the expression of IL-6 in blood mononuclear cells and PGE2 levels in cartilage tissue. The possible mechanism of action of the B. monniera extract may be through its stabilizing action on lysosomal membranes and hence the decrease in spread of inflammation.