Subconjunctival injections of antibiotics produce very high corneal levels of drug that fall rapidly as the drug is dissipated. The authors studied the effects of liposome-encapsulation as a means of slowing release from the subconjunctival depot. Liposomes (0.1-1.0 micron) were made of phosphatidic acid, phosphatidylcholine, and alpha-tocopherol. The final suspension contained gentamicin 10 mg/ml with 60-70% encapsulated. Rabbits were given a single subconjunctival injection of liposome-encapsulated gentamicin, gentamicin with "empty" liposomes, or gentamicin alone. In each instance the dose of antibiotic was 5 mg. Gentamicin levels in the sclera and cornea, measured 3,9, and 24 hr after injection, were generally markedly higher with the liposome-encapsulated drug than with the other two preparations. The differences were 5- to 20-fold in the cornea at 24 hr and were statistically significant for temporal cornea. Liposome-encapsulation may be a useful means of extending the effects of a subconjunctival injection of antibiotic.