Purpose The utility of in vivo confocal microscopy (IVCM) in the investigation of palpebral conjunctival and corneal inflammation in patients with meibomian gland dysfunction (MGD)-associated refractory dry eye symptoms following gland expression, despite objective clinical improvement. Methods A retrospective, observational pilot study was conducted evaluating five patients with MGD-associated refractory dry eye symptoms and three control groups: symptomatic untreated MGD patients (n = 3), treatment-responsive MGD patients with improved symptoms (n = 3) and asymptomatic healthy normals (n = 11). Ocular surface disease index (OSDI) scores, tear break-up time (TBUT), the number of meibomian glands yielding liquid secretion (MGYLS), palpebral conjunctival epithelial and substantia propria immune cell (EIC, SIC), and corneal dendritic cell (DC) densities were measured. Results Despite clinical improvement (TBUT: 6.4 ± 1.2 s to 10.1 ± 2.1 s, P = 0.03; MGYLS: 3.5 ± 0.8 glands to 7.0 ± 1.1 glands, P = 0.13) and a normal clinical examination post treatment, MGD patients remained symptomatic. IVCM revealed increased immune cells in the palpebral conjunctiva (refractory MGD EIC = 592.6 ± 110.1 cells/ mm 2 ; untreated MGD EIC = 522.6 ± 104.7 cells/mm 2 , P = 0.69; responsive MGD EIC = 194.9 ± 119.4 cells/mm 2 , Po0.01; normals EIC = 123.7 ± 19.2 cells/mm 2 , Po 0.001), but not the cornea (refractory MGD DC = 60.9 ± 28.3 cells/mm 2 ; normals DC = 25.9 ± 6.3 cells/mm 2 ; P = 0.43). EIC did not correlate with TBUT (R s = − 0.26, P = 0.33). OSDI scores correlated with both EIC (R s = 0.76, Po0.001) and TBUT (R s = − 0.69, Po0.01) but not SIC. Intraglandular immune cells were also seen. Conclusion MGD-associated refractory symptoms and the symptom-sign disparity may be explained by clinically non-apparent, active inflammation of the palpebral conjunctiva as detected by IVCM. These patients may benefit from anti-inflammatory therapy.