The effectiveness of norfloxacin as an antibacterial agent in ophthalmology is limited by poor drug delivery and limited ocular bioavailability. Liposomes containing norfloxacin have been prepared from different phospholipids using a novel technique with an encapsulation efficiency sixteen times greater than that of a conventional film method. The in-vitro release of the norfloxacin and the transcorneal characteristics of the liposomes have been evaluated. Differential scanning calorimetry was used to determine the interaction occurring between liposomes and cornea. The release of liposome-entrapped norfloxacin was affected by the pH of the environment. In the in-vitro corneal perfusion studies, norfloxacin-loaded liposome was transferred through the cornea at a slower rate than was the free drug. Norfloxacin-loaded liposomes were accumulated primarily in the cornea. The drug corneal retention of the lipids increased in the order dimyristoyl-L-alpha-phosphatidylcholine < dipalmitoyl-L-alpha -phosphatidylcholine < distearoyl-L-alpha-phosphatidylcholine. In the corneal drug-elimination study, liposomal norfloxacin increased the loading of the drug in cornea; the maximum value of the loading occurred 5 h after dosing. The drainage of liposomes from the cornea was somewhat slower than the solution form. Accumulation of norfloxacin in the cornea was greater for the liposome-entrapped drug. The results suggest that norfloxacin-loaded liposomes are absorbed by the cornea via endocytosis.