We evaluated the efficacy of topical cyclodextrin-encapsulated FK-506 in the prevention of experimental corneal allograft rejection. Two weeks after inducing corneal inflammation and neovascularization with 8-0 silk sutures, 23 albino rabbits received a unilateral 8-mm diameter central penetrating corneal allograft from pigmented donors. Rabbits were randomly assigned to no treatment (eight eyes), topical cyclodextrin four times daily for 28 days (seven eyes), or topical FK-506 0.3 mg/ml in a cyclodextrin suspension (eight eyes) four times daily for 28 days. Grafts were examined daily for degree of inflammation, neovascularization, edema, and signs of rejection for up to 100 days. Seven of eight (88%) untreated grafts and five of seven (71%) cyclodextrin-treated grafts rejected at a median of 3 weeks after transplantation, whereas only two (25%) of eight FK-506-treated grafts rejected and did so at a significantly longer interval (p < 0.005). Topical FK-506 prevents or delays corneal allograft rejection after experimental corneal transplantation.