The expression of the adhesion molecule vascular cell adhesion molecule-1 (VCAM-1) on endothelial cells enables the attachment of leukocytes to the endothelium, which may lead to inflammation and the development of atherosclerosis. Magnolol is a major bioactive compound derived from the plant species Magnolia officinalis. In this study, we synthesized a novel nanoparticle formulation of magnolol to improve its water solubility and physicochemical properties, evaluated its effects on TNF-α-induced VCAM-1 expression in endothelial cells, and determined the signal transduction pathways involved. Our findings demonstrated that the magnolol nanoparticle system showed great improvements in physicochemical properties and water solubility owing to a reduction in particle size, transformation from a crystalline to amorphous structure, and the formation of hydrogen bonds with the nanoparticle carriers. In terms of its biological actions, magnolol nanoparticles attenuated TNF-α-induced VCAM-1 protein expression, promoter activity, and mRNA expression in endothelial cells in vitro. This was found to be mediated by the ERK, AKT, and NF-κB signaling pathways. In addition, magnolol nanoparticles inhibited TNF-α-induced leukocyte adhesion to endothelial cells, and suppressed TNF-α-induced VCAM-1 expression in the aortic endothelium of mice. In summary, since magnolol nanoparticles inhibit endothelial VCAM-1 expression and leukocyte adhesion to endothelial cells, this novel drug formulation may be a potentially useful therapeutic formulation to prevent the development of atherosclerosis and inflammatory diseases.