A novel Flurbiprofen (FLB)-in-liposome-in-hydrogel formulation was developed, as a method to sustain the release and increase the ocular bioavailability of FLB following intravitreal injection. For this, FLB loading into liposomes was optimized and liposomes were entrapped in thermosensitive hydrogels consisted of Pluronic F-127 (P). FLB solution, liposomes, and FLB dissolved in hydrogel were also used as control formulations. Actively loaded liposomes were found to be optimal for high FLB loading and small size, while in vitro studies revealed that P concentration of 18% (w/v) was best to retain the integrity of the hydrogel-dispersed liposome, compared to a 20% concentration. The in vitro release of FLB was significantly sustained when FLB-liposomes were dispersed in the hydrogel compared to hydrogel dissolved FLB, as well as the other control formulations. In vivo studies were carried out in pigmented rabbits which were injected through a 27G needle with 1 mg/mL FLB in the different formulation-types. Ophthalmic examinations after intravitreal injection of all FLB formulations, revealed no evidence of inflammation, hemorrhage, uveitis or endophthalmitis. Pharmacokinetic analysis results confirm that the hybrid drug delivery system increases the bioavailability (by 1.9 times compared to solution), and extends the presence of the drug in the vitreous cavity, while liposome and hydrogel formulations demonstrate intermediate performance. Furthermore the hybrid system increases MRT of FLB in aqueous humor and retina/choroid tissues, compared to all the control formulations. Currently the potential therapeutic advances of FLB sustained release formulations for IVT administration are being evaluated.