Dry eye disease (DED) or keratoconjunctivitis sicca is a chronic multifactorial disorder of the ocular surface caused by tear film dysfunction. Symptoms include dryness, irritation, discomfort and visual disturbance, and standard treatment includes the use of lubricants and topical steroids. Secondary inflammation plays a prominent role in the development and propagation of this debilitating condition. To address this we have investigated the pilot scale development of an innovative drug delivery system using a dexamethasone-encapsulated cholesterol-Labrafac™ lipophile nanostructured lipid carrier (NLC)-based ophthalmic formulation, which could be developed as an eye drop to treat DED and any associated acute exacerbations. After rapid screening of a range of laboratory scale pre-formulations, the chosen formulation was prepared at pilot scale with a particle size of 19.51 ± 0.5 nm, an encapsulation efficiency of 99.6 ± 0.5%, a PDI of 0.08, and an extended stability of 6 months at 4 °C. This potential ophthalmic formulation was observed to have high tolerability and internalization capacity for human corneal epithelial cells, with similar behavior demonstrated on ex vivo porcine cornea studies, suggesting suitable distribution on the ocular surface. Further, ELISA was used to study the impact of the pilot scale formulation on a range of inflammatory biomarkers. The most successful dexamethasone-loaded NLC showed a 5-fold reduction of TNF-α production over dexamethasone solution alone, with comparable results for MMP-9 and IL-6. The ease of formulation, scalability, performance and biomarker assays suggest that this NLC formulation could be a viable option for the topical treatment of DED.