Acta Ophthalmol. 2010: 88: 901–904 Abstract. Purpose:  To study the clinical effect of topical controlled‐release ophthalmic fluconazole liposomal formulation and to compare its effect with fluconazole solution in a reproducible model of Candida keratitis in rabbits. Methods:  Forty adult rabbits were included in this study. Right eyes were inoculated with freshly prepared Caindida albicans strain no. 4925 and showed signs of infected keratitis. The rabbits were divided randomly into two groups: in the first group (18 rabbits) the right eyes received fluconazole solution, while in the second group (22 rabbits) the right eyes received fluconazole‐loaded liposomes. The rabbits’ eyes were examined daily over a 21‐day period and results were recorded. Results:  Rabbits infected with C. albicans responded better and showed more improvement in terms of size of ulcer and hypopyon using fluconazole‐loaded liposomal formulae than using fluconazole solution. In the first group (solution), nine rabbits’ cornea showed complete healing (50%) at the end of third week while in group 2 (liposome), 19 rabbits’ cornea showed complete healing (86.4%) at equal duration. These results were statistically significant. Conclusion:  Therapy with topical liposomal fluconazole (2 mg/ml) was successful in eliminating experimental C. albicans infection of the rabbit cornea and was superior to fluconazole solution.