Purpose: To investigate the effect of diclofenac, a potent nonsteroidal anti-inflammatory drug, formulated in hyaluronan (diclofenac/HA) on angiogenesis in vitro and its intraocular toxicity in vivo. Methods: The effect of diclofenac/HA on angiogenesis was determined by choriocapillary endothelial cells on Matrigel stimulated by vascular endothelial growth factor (VEGF). The tube areas were quantified by image digital analysis. For toxicity study, diclofenac/HA was injected intravitreally with a dose range from 100 to 1080 µg in 26 rabbits following gas compression vitrectomy. Potential toxicity was assessed by indirect ophthalmoscopy and by histological studies (light and electron microscopy). Retinal function was monitored by electroretinography (ERG) in six rabbits that received 400 µg of diclofenac/HA. Results: Diclofenac/HA, 180, 90 µg/ml, inhibited tube formation to 24% and 55% of the standard group (Media Ham’s F12 plus 5% fetal calf serum and 50 ng/ml VEGF) respectively (P<0.01). Intravitreal injection of 540 µg or higher doses of diclofenac/HA resulted in ocular toxicity in the rabbit, demonstrated as cataract, vitreous haze and retinal damage observed by indirect ophthalmoscopy and light- and electron- microscopic examinations. No toxicity was observed in the eyes that received 400 µg or less diclofenac/HA, which was further supported by the normal ERG examined at 4 and 25 days post injection. Conclusions: Diclofenac/HA inhibits tube formation in vitro and is nontoxic to the rabbit retina at concentrations that are inhibitory to tube formation. Our results suggest diclofenac/HA may be an effective candidate to inhibit ocular neovascularisation related to granulomatous reaction in the eye.