Delivery of steroids to the retina is currently undertaken with invasive injections into the vitreous cavity. This paper describes a non-invasive method to deliver steroids in therapeutic levels to the retina in rabbits. Dexamethasone was formulated as somewhat water-soluble dexamethasone/gamma-cyclodextrin (gammaCD) microparticles in a low-viscosity aqueous eye drop suspension. The mean (+/-standard deviation) diameter of the particles was 20.4+/-10.3 microm, with no particles larger than 60 microm. The aqueous suspension formulation was tested in rabbits and compared with an aqueous dexamethasone eye drop solution containing randomly methylated beta-cyclodextrin (RMbetaCD). The dexamethasone concentration was identical in both formulations (15 mg mL(-1)). The drug was administered to the left eye but determined in both eyes. The amount reaching different eye tissues via the topical route was determined by subtracting the amount found in the right eye from the amount found in the left eye. Two hours after single application of the dexamethasone/gammaCD eye drops to rabbits the mean (+/-s.d.) concentration in vitreous was 29+/-16 ng g(-1), 86% of which reached vitreous via the topical route and in retina the concentration was 57+/-22 ng g(-1) (49% via topical route). For the RMbetaCD the values were 22.6+/-9 and 66+/-49 ng g(-1) (73 and 14% via topical route), respectively. These steroid levels are comparable with the dexamethasone concentration achieved 1 month after intravitreal injection. The aqueous dexamethasone/gammaCD eye drop formulation was chemically stable during 7 months storage and well tolerated with no visible short-term side effects.