Gelation of pectin caused by divalent cations especially calcium ions has been applied to develop an ophthalmic formulation of azithromycin in the present study. Rapid elimination of drug on instillation into cul de sac would be minimal with in situ gelling ophthalmic solution leading to increased precorneal contact time and prolonged drug delivery. In the formulation development studies pectin was used in different concentrations (1-5% w/v) and different proportions of the hydrocolloids hydroxypropyl methylcellulose and sodium carboxymethyl cellulose of different grades of viscosity were used. The primary criteria for formulation optimization were gelling capacity and rheological behaviour. In addition, formulations were evaluated for pH, and antimicrobial efficacy and drug release. The clarity, pH, gelation in simulated tear fluid and rheological properties of the optimized formulations were satisfactory. The formulations inhibited the growth of Staphylococcus aureus effectively in cup–plate method and were proved to be safe and non irritant on rabbit eyes. The results indicate that pectin based in situ gels can be successfully used to prolong the duration of action of azithromycin.