Cetirizine hydrochloride (CTZ), an antiallergic drug, is a new‐generation H1 receptor antagonist and a second‐generation H1 antihistamine. We aimed to prepare cetirizine hydrochloride liposomes, based on which cetirizine hydrochloride liposomal (CTZL) in situ gel (ISG) was prepared, to improve the retention time in the eye. CTZL were prepared by the ethanol injection method combined with the ammonium sulfate gradient method. A CTZ liposomal temperature‐sensitive gel was prepared using the cold dissolution method. Large‐eared white rabbits were used in retention and irritation experiments. The liposomes were small single‐chambered liposomes, spherical or sphere‐like, with a vesicle size of 187.03 ± 6.20 nm, an encapsulation efficiency of 70.39 ± 1.13%, and a drug loading capacity of 4.63 ± 0.06%. The gelling temperatures before and after dilution by simulated tear fluid were 26.1 ± 0.2°C and 34.2 ± 0.2°C, the vesicle size was 184.94 ± 7.28 nm, and the liposomes were spherical or sphere‐like in the gel matrix. The in vitro dissolution and release experiments indicate that the gel was released upon dissolution and exhibited a zero‐level release pattern. Preparation into liposomes and liposomal gels prolonged the ocular retention time of the formulation without ocular irritation.