Alkali burn is a potentially blinding corneal injury. During the progression of alkali burn‐induced injury, overwhelmed oxidative stress in the cornea triggers cell damage, including oxidative changes in cellular macromolecules and lipid peroxidation in membranes, leading to impaired corneal transparency, decreased vision, or even blindness. In this study, we identified that ferroptosis, a type of lipid peroxidation‐dependent cell death, mediated alkali burn‐induced corneal injury. Ferroptosis‐targeting therapy protected the cornea from cell damage and neovascularization. However, the specific ferroptosis inhibitor ferrostatin‐1 (Fer‐1) is hydrophobic and cannot be directly applied in the clinic. Therefore, we developed Fer‐1‐loaded liposomes (Fer‐1‐NPs) to improve the bioavailability of Fer‐1. Our study demonstrated that Fer‐1‐NPs exerted remarkable curative effects regarding corneal opacity and neovascularization in vivo. The efficacy was comparable to that of dexamethasone, but without appreciable side effects. The significant suppression of ferroptosis (induced by lipid peroxidation and mitochondria disruption), inflammation, and neovascularization might be the mechanisms underlying the therapeutic effect of Fer‐1‐NPs. Moreover, the Fer‐1‐NPs treatment showed no signs of cytotoxicity, hematologic toxicity, or visceral organ damage, which further confirmed the biocompatibility. Overall, Fer‐1‐NPs provide a new prospect for safe and effective therapy for corneal alkali burn.