Nanocrystal drug formulation involves several critical manufacturing procedures that result in complex structures to improve drug solubility, dissolution, bioavailability, and consequently the efficacy of poorly soluble Biopharmaceutics Classification System (BCS) II and IV drugs. Nanocrystal formulation of an already approved oral drug may need additional immunotoxic assessment due to changes in the physical properties of the active pharmaceutical ingredient (API). In this study, we selected Zileuton, an FDA-approved drug that belongs to BCS-II for nanocrystal formulation. To evaluate the efficacy and mucosal immune profile of the nanocrystal drug, 10-week-old rats were dosed using capsules containing either API alone or nanocrystal formulated Zileuton (NDZ), or with a physical mixture (PM) using flexible oral gavage syringes. Control groups consisted of untreated, or placebo treated animals. Test formulations were administrated to rats at a dose of 30 mg/kg body weight (bw) once a day for 15 days. The rats treated with NDZ or PM had approximately 4.0 times lower (7.5 mg/kg bw) API when compared to the micron sized API treated rats. At the end of treatment, mucosal (intestinal tissue) and circulating cytokines were measured. The immunological response revealed that NDZ decreased several proinflammatory cytokines in the ileal mucosa (Interleukin-18, Tumor necrosis Factor-α and RANTES [regulated upon activation, normal T cell expressed and secreted]). A similar pattern in the cytokine profile was also observed for the micron sized API and PM treated rats. The cytokine production revealed that there was a significant increase in the production of IL-1β and IL-10 in the females in all experimental groups. Additionally, NDZ showed an immunosuppressive effect on proinflammatory cytokines both locally and systemically, which was similar to the response in micron sized API treated rats. These findings indicate that NDZ significantly decreased several proinflammatory cytokines and it displays less immunotoxicity, probably due to the nanocrystal formulation. Thus, the nanocrystal formulation is more suitable for oral drug delivery, as it exhibited better efficacy, safety, and reduced toxicity.