Abstract Variable efficacies have been reported for glucocorticoid drugs as anti-inflammatory treatment after stroke. We applied an alternative drug delivery strategy, by injection of dexamethasone phosphate-containing liposomes in combination with recombinant tissue plasminogen activator (rtPA), in an experimental stroke model, and tested the hypothesis that this approach improves behavioral recovery and reduces lesion growth. Rats were subjected to right middle cerebral artery occlusion with a blood clot. After 2 h, animals were intravenously injected with rtPA plus empty long-circulating liposomes (LCL), free dexamethasone phosphate (DXP), or DXP-containing LCL (LCL-DXP). Neurological status was evaluated with different behavioral tests up to 7 days after stroke. Lesion development was assessed by magnetic resonance imaging of tissue and perfusion parameters from 0-2 h until 7 days after stroke. Expression of brain inflammatory markers was measured with RT-PCR at post-stroke day 7. Treatment with rtPA plus LCL-DXP resulted in significantly improved behavioral outcome as compared to treatment with rtPA plus empty LCL or free DXP. Acute and final brain lesion sizes were comparable between treatment groups; however a predictive algorithm revealed a significantly larger salvaged tissue area after treatment with LCL-DXP. We conclude that delivery of dexamethasone phosphate via LCL in combination with rtPA-induced thrombolysis can significantly improve outcome after stroke. Furthermore, magnetic resonance imaging-based predictive algorithms provide a sensitive means to measure treatment effects on lesion development.