Background: Fluoropyrimidines may be effective in preventing proliferative vitreoretinopathy after repair of complicated retinal detachments. Liposome encapsulation of these antiproliferative drugs may extend the intravitreal half-life and increase their efficacy. Methods: The current study evaluated the pharma-cokinetic behavior of intravitreally injected 5-fluorouridine (5-FUR), free and encapsulated in liposomes, either conventionally or coated with collagen into 25 New Zealand rabbits. Additionally, we investigated the retinal toxicity of intravitreal injections of 100, 250 and 500 µg as well as 1 mg 5-FUR as free drug or encapsulated in liposomes in the rabbit eye. Results: The half-life of free 5-FUR after liposome injection into the vitreous cavity was 18.17+2.43 h, considerably longer than the half-life of free 5-FUR (0.82 h). Electrophysiologic tests did not show any changes in latency and a-wave amplitude and minimal changes in the b-wave amplitude. Histopathologic studies revealed integrity of the inner limiting membrane, and mild vacuolization in the outer retina. Conclusion: Encapsulation of 5-FUR within liposomes markedly increases its intravitreal half-life. Our study suggests that liposome-encapsulated 5-FUR is not toxic to the retina even at doses of 1 mg.