Background and purpose: Conventional topical ophthalmic aqueous solutions and suspensions are often associated with low bioavailability and high administration frequency, pulsatile dose and poor exposure to certain ocular parts. The aim of this study was to develop an ophthalmic nanoparticles loaded gel, for delivering prednisolone acetate (PA), to increase dosing accuracy, bioavailability, and accordingly, efficiency of PA in treating inflammatory ocular diseases. Methods: A novel formulation of self-assembled nanoparticles was prepared by the complexation of chitosan (CS) and, the counter-ion, sodium deoxycholate (SD), loaded with the poorly-water-soluble PA. Particle size, zeta potential, encapsulation efficiency (EE) and drug loading content (LC) of prepared nanoparticles were assessed. Moreover, the nanoparticles were characterized using differential scanning calorimetry (DSC) and Fourier transform infrared spectroscopy (FTIR). Drug release and eye anti-inflammatory potential of the prepared novel formulation was investigated. Results: Mean particle size of the nanoparticles have dropped from 976 nm ±43 (PDI 1.285) to 480 nm ±28 (PDI 1.396) when the ratio of CS-SD was decreased. The incorporation of 0.1-0.3% of polyvinyl alcohol (PVA), in the preparation stages, resulted in smaller nanoparticles: 462 nm ±19 (PDI 0.942) and 321 nm ±22 (PDI 0.454) respectively. DSC and FTIR results demonstrated the interaction between CS and SD, however, no interactions were detected between PA and CS or SD. Drug release of PA as received, in simulated tears fluid (pH 7.4), showed a twofold increase (reaching an average of 98.6% in 24 hours) when incorporated into an optimized nanoparticle gel formulation (1:5 CS-SD). Conclusion: The anti-inflammatory effect of PA nanoparticles loaded gel on female guinea pig eyes was significantly superior to that of the micronized drug loaded gel (P < 0.05).