OBJECTIVE Allograft rejection is the major cause of corneal graft failure. To inhibit corneal allograft rejection, rapamycin as a novel immunosuppressive agent has been discovered. However, the high water insolubility and low bioavailability of rapamycin has strongly hindered its application in the clinical setting. In this paper, we attempted to develop a novel rapamycin nano-formulation using poly(ε-caprolactone)-poly(ethylene glycol)-poly(ε-caprolactone) (PCEC) nanoparticles as carrier by an emulsion evaporation method for potential application in corneal transplantation. METHODS The solubility of rapamycin in the nano-formulation was determined and in-vitro release studies were performed. The developed rapamycin-loaded PCEC nanoparticles were further characterized by dynamic light scattering, transmission electron microscopy, X-ray diffraction and differential scanning calorimetery. Toxicity studies were performed in eye-related cell lines. RESULTS The rapamycin in nano-formulation exhibited ∼10³-fold increased solubility as compared with native rapamycin. According to the results of the in-vitro cytotoxicity assay, the developed PCEC nanoparticles did not exhibit any apparent cytotoxicity against various eye-related cell lines with PCEC nanoparticle concentrations in the range of 0.05-10 mg/ml. In-vitro release study showed that the release of rapamycin was sustained from PCEC nanoparticles over a period of 48 h. CONCLUSIONS All the results suggested that the developed rapamycin-loaded PCEC nanoparticles might be suitable for immunosuppression in corneal transplantation by instillation administration.