The potential use of liposomes for ocular delivery of encapsulated prednisolone was evaluated in the rabbit\'s eye. Liposomes used in this study, multilamellar and unilamellar, were prepared from dipalmitoyl phosphatidylcholine and cholesterol, with or without a charge inducing agent. Stearylamine and dicetyl phosphate have been incorporated so as to import either a positive or a negative surface charge to liposomes. Sequential extrusion of liposomes through polycarbonate membranes was used to improve the homogeneity of the preparations. Results demonstrated that the maximal encapsulation of drug was achieved by using multilamellar liposomal formulations prepared with negatively charged lipid. The in-vivo performance of various formulations of the drug was assessed on the basis of the influence of the drug on the intra-ocular pressure. The data were interpreted in terms of area under the intra-ocular pressure/time curve, duration of action, the maximum response, and time of maximum response which have been taken in consideration as paraeters of drug activity. This study showed that the intra-ocular activiy of the drug using various liposomal form was greater than that of solution form. In addition, regarding the liposomal types, multilamellar liposomes produced significantly higher drug activity than the small unilamellar ones. Also, in both liposomal types, the parameters of drug activity depends to great extent on the liposomal surface charge and its influence was generally greatest with positively harged multilamellar liposomes as compared to other formulations. This may be attributed to electrostatic bindings between corneal surface bears a net negative charge and the positively charged liposomes. Accordingly, positively charged multilamellar liposomes represent an optimal delivery system which appeared to be suitable in modulating drug action for selective targeting in the ocular therapy.