We prepared magnesium hydroxide (MH) nanoparticles by a bead mill method, and investigated whether the co-instillation of MH nanoparticles improves the low transcorneal penetration of water-soluble drugs, such as the anti-glaucoma eye drug timolol maleate (TM). MH particle size was decreased by the bead mill treatment to a mean particle size of 71 nm. In addition, the MH nanoparticles were highly stable. Next, we demonstrated the effect of MH nanoparticles on the corneal surface. MH shows only slight solubility in lacrimal fluid, and the instillation of MH nanoparticles for 14 days did not affect the behavior (balance of secretion and excretion) of the lacrimal fluid in rabbit corneas. Moreover, there was no observable corneal toxicity of MH nanoparticles, and treatment with MH nanoparticles enhanced the intercellular space ratio in the eyes of rats. MH alone did not permeate into the cornea; however, the co-instillation of MH nanoparticles and dissolved TM (nMTFC) enhanced the corneal penetration of TM. In addition, the intraocular pressure (IOP)-reducing effect of nMTFC was significantly higher than those of the TM solution or the co-instillation of MH microparticles and TM. In conclusion, we found that MH nanoparticles enhance the corneal penetration of dissolved TM with no observable corneal stimulation or obstruction of the nasolacrimal duct by the MH nanoparticles. It is possible that the co-instillation of MH nanoparticles may provide a useful way to improve the bioavailability of water-soluble drugs in the ophthalmic field. These findings provide significant information that can be used to design further studies aimed at developing anti-glaucoma eye drugs.