p-Hydroxybenzyl alcohol (HBA) is one of phenolic compounds in herbal agents and plays a pivotal role in protection against oxidative damage-related diseases due to anti-inflammatory effects. We have developed a new biodegradable and anti-inflammatory peroxalate copolymer in which HBA is chemically incorporated into its backbone. The HBA-incorporated copolyoxalate (HPOX) was synthesized from a condensation reaction of oxalyl chloride, 1,4-cyclohexamethanol and HBA and was capable of releasing pharmaceutically active HBA during hydrolytic degradation. HPOX could be dispersed into a single emulsion for the formulation of nanoparticles which had a mean size similar to 500 nm in diameter. The nanoparticles released HBA which was able to inhibit the production of nitric oxide (NO) by suppressing the expression of inducible nitric oxide synthase (iNOS) in lipopolysaccharide (LPS)-activated RAW 264.7 macrophage cells. HPOX nanoparticles also reduced the production of tumor necrosis factor-alpha (TNF-alpha). The remarkable features of HPOX are that the polymer degrades completely into small molecules and one of degradation products is a pharmaceutically active compound. We anticipate that HPOX is highly potent and versatile for the treatment of inflammatory diseases.