Periocular povidone-iodine (PI) and polyvinyl alcohol-iodine (PAI) have had a major role in the prevention of endophthalmitis. The purpose of this study was to investigate the corneal epithelial toxicity of PAI in a rabbit eye model using corneal resistance (CR) measurement, which is a good indicator of cell barrier function. Rabbit eyes were administered PAI solution at 4-, 6-, 8-, or 16-fold dilution with physiological saline solution (saline) or saline alone (control), to the conjunctival sac with/without wash-out with saline. Corneal epithelial injury assessed by fluorescein staining and the CR ratio was measured at 10 minutes (min) to 96 hours (h) after the initial administration. Histological observation was performed in the eyes following the PAI or control administrations. At 120 min after administration of PAI solution, the CR ratio was decreased and superficial punctate keratopathy (SPK) was significantly increased in each of the PAI-administered groups compared to the control. Recovery of CR and SPK after administration of 6- or 8-fold dilution of PAI was significantly delayed in eyes that were not subsequently washed with saline compared with eyes that were. Pre- or post-instillation of 2% rebamipide ophthalmic suspension significantly reduced PAI induced-SPK and -decrease of CR ratio. The CR method was able to accurately and quantitatively evaluate fine corneal epithelial injury. It is suggested that eyes should be washed with saline solution after administration of PAI solution or the instillation of rebamipide to prevent or reduce corneal epithelial injury.