Inflammation is an important feature of great number of diseases. It is a response of the tissue to an injury, infection, irritation of foreign substance. It is a part of host defence, but when the response becomes too great it may be far worse than the diseases itself and in extreme condition, it may be fatal. There is an increasing demand for the medicinal plants in developing countries like India. Attention need to be given to assess the medicinal value of such plants to explore the potential drugs out of it. Medicinal plants constitute important components of flora and are widely distributed in different region of India. The aim of present study was to assess the development of Polyherbal formulation i.e. F1 & F2 from ethanolic leaves extract of the plants Azadirachta indica A. Juss and Momardica charantia Linn and evaluation of anti-inflammatory activity of prepared Polyherbal formulation .The formulation F1 and F2 showed the significant anti-inflammatory activity comparable to the standard drug Indomethacin against carrageenan induced rat paw edema method. The formulation F1 is significantly reduced the inflammation induced by carrageenan as compared to F2 using standard drug Indomethacin. The F1 reduced the inflammation by 48.19 % compared to the control treated group.