In order to maintain adequate drug levels in ocular tissues, frequent drug instillation is necessary in treatment of ophthalmic disorders.  Flurbiprofen, NSAIDs, was entrapped in EPC liposomes dispersed in thermosensitive polaxamer gel.  The size and Zeta-​potential of the vesicles were analyzed.  The in-​vitro leakage of the entrapped and free drug were carried out under sink condition, the t1​/2 for entrapped drug was 4.1 fold when compared to that of the free drug.  The concns. of Flurbiprofen in the ocular tissues of the rabbits for both formulations (entrapped and free drug) were detd. by HPLC measurement.  The in-​vivo study depicted that entrapment of the drug in liposomes enhanced the drug precorneal retention, drug penetration and consequently increased the drug levels in ocular tissues compared to free drug formulation.  The study also revealed that, the highest drug level deposited in the cornea and sclera followed by aq. humor and vitreous body.  The pharmacokinetic parameters (AUC and C_max) and the significance t-​test levels (P values) for the difference between entrapped and free drug were calcd.  It was found that the majority of differences were very highly to highly significant.  These findings indicate that entrapment of drug in liposomes may be promising formulation, particularly when dispersed in highly viscous system, for ophthalmic therapeutic use.