Current arthritis treatments often have side-effects attributable to active compounds as well as route of administration. Cannabidiol (CBD) attenuates inflammation and pain without side-effects, but CBD is hydrophobic and has poor oral bioavailability. Topical drug application avoids gastrointestinal administration, first pass metabolism, providing more constant plasma levels. This study examined efficacy of transdermal CBD for reduction in inflammation and pain, assessing any adverse effects in a rat complete Freund’s adjuvant-induced mono arthritic knee joint model. CBD gels were applied for 4 consecutive days after arthritis induction. Joint circumference and immune cell invasion in histological sections were measured to indicate level of inflammation. Paw withdrawal latency (PWL) in response to noxious heat stimulation determined nociceptive sensitization, and exploratory behaviour ascertained animal’s activity level. R Measurement of plasma CBD concentration provided by transdermal absorption revealed linearity with 0.6–6.2 mg/day doses. Transdermal CBD gel significantly reduced joint swelling, limb posture scores as a rating of spontaneous pain, immune cell infiltration and thickening of the synovial membrane in a dose-dependent manner. PWL recovered to near baseline level. Immunohistochemical analysis of spinal cord (CGRP, OX42) and dorsal root ganglia revealed dose-dependent reductions of pro-inflammatory biomarkers. Results showed 6.2 and 62 mg/day were effective doses. Exploratory behaviour was not altered by CBD indicating limited effect on higher brain function.