Tofacitinib (TFB), a Janus kinase inhibitor, has shown excellent success off-label in treating various dermatological diseases, especially alopecia areata (AA). However, TFB’s safe and targeted delivery into hair follicles (HFs) is highly desirable due to its systemic adverse effects. Nanoparticles (NPs) can enhance targeted follicular drug delivery and minimize interfollicular permeation and thereby reduce systemic drug exposure. In this study, we report a facile method to assemble the stable and uniform 240 nm TFB loaded squalenyl derivative (SqD) nanoparticles (TFB SqD NPs) in aqueous solution, which allowed an excellent loading capacity (LC) of 20%. The SqD NPs showed an enhanced TFB delivery into HFs compared to the aqueous formulations of plain drug in an ex vivo pig ear model. Furthermore, the therapeutic efficacy of the TFB SqD NPs was studied in a mouse model of allergic dermatitis by ear swelling reduction and compared to TFB dissolved in a non-aqueous mixture of acetone and DMSO (7:1 v/v). Whereas such formulation would not be acceptable for use in the clinic, the TFB SqD NPs dispersed in water illustrated a better reduction in inflammatory effects than plain TFB’s aqueous formulation, implying both encouraging good in vivo efficacy and safety. These findings support the potential of TFB SqD NPs for developing a long-term topical therapy of AA.