To develop statistically optimized brain targeted Tween 80 coated chitosan nanoparticulate formulation for oral delivery of doxycycline hydrochloride for the treatment of psychosis and to evaluate its protective effect on ketamine induced behavioral, biochemical, neurochemical and histological alterations in mice. 3² full factorial design was used to optimize the nanoparticulate formulation to minimize particle size and maximize entrapment efficiency, while independent variables chosen were concentration of chitosan and Tween 80. The optimized formulation was characterized by particle size, drug entrapment efficiency, Fourier transform infrared, Transmission electron microscopy analysis and drug release behavior. Pure doxycycline hydrochloride (25 and 50 mg/kg, p.o.) and optimized doxycycline hydrochloride encapsulated Tween 80 coated chitosan nanoparticles (DCNPopt) (equivalent to 25 mg/kg doxycycline hydrochloride, p.o.) were explored against ketamine induced psychosis in mice. The experimental studies for DCNPopt, with mean particle size 237 nm and entrapment efficiency 78.16%, elucidated that the formulation successfully passed through blood brain barrier and exhibited significant antipsychotic activity. The underlying mechanism of action was further confirmed by behavioral, biochemical, neurochemical estimations and histopathological study. Significantly enhanced GABA and GSH level and diminished MDA, TNF-? and dopamine levels were observed after administration of DCNPopt at just half the dose of pure doxycycline hydrochloride, showing better penetration of doxycyline hydrochloride in the form of Tween 80 coated nanoparticles through blood brain barrier. This study demonstrates the hydrophilic drug doxycycline hydrochloride, loaded in Tween 80 coated chitosan nanoparticles, can be effectively brain targeted through oral delivery and therefore represents a suitable approach for the treatment of psychotic symptoms.