Purpose: Fasudil hydrochloride (Fas), a rho-associated protein kinase inhibitor, proved to be promising for glaucoma management owing to its IOP lowering and antioxidant effects. However, its highly hydrophilic nature limits ocular permeation and bioavailability. Hence, the study objective was the development of Fas loaded vesicular system with high entrapment efficiency formulated as a thermosensitive gel for local administration aiming to enhance ocular retention and permeation and hence therapeutic efficacy. Methods: Fasudil complex with phospholipid (Fas/PL) was prepared by solvent evaporation technique and characterized by Fourier transform infrared spectroscopy (FT-IR) and X-ray diffraction (XRD). Fas/PL was further formulated as liposomes by methanol injection method and characterized regarding colloidal properties, entrapment efficiency (EE%) and in vitro drug release. The prepared liposomes were incorporated into an optimized thermosensitive in situ gel (Fas/PL-Lipo P407/HPMCgel ) selected based on gelling time and temperature and rheological properties. The effect of incorporation into gel on the in vitro characteristics of liposomes was investigated. The in vitro mucoadhesive potential, ex vivo permeation, irritability and efficacy in a glaucoma rabbit model were also assessed. Results: FT-IR and XRD suggested interactions between Fas and PL, proposing complexation. Fas/PL liposomal dispersions showed good colloidal properties (particle size: 132.5 ± 1.6 nm, zeta potential: −21.6 ± 0.9 and %EE 78.6 ± 0.3%) with sustained drug release. In situ thermosensitive gel (20% poloxamer 407 and 0.5% HPMC) showed optimum gelling properties. The selected gel formulation reduced burst release of the drug, enhanced mucoadhesive properties and prolonged corneal permeation ex vivo. HET-CAM test confirmed that the prepared formulations were non-irritant. In vivo pharmacodynamic study indicated improved bioavailability and significantly lower intraocular pressure (IOP) of Fas/PL-Lipo P407/HPMC gel compared to drug solution and liposomal dispersion. Conclusion:The results present Fas/PL-Lipo P407/HPMC gel as a potential platform for ophthalmic delivery of fasudil with improved pharmaceutical attributes and enhanced bioavailability and efficacy in glaucoma.