The purpose of this study was to evaluate the potential of  cationic submicron emulsion as a colloidal drug delivery system for poorly-soluble Loteprednol etabonate in keratoconjunctivitis sicca (dry eye syndrome). Cationic submicron emulsion was formulated and optimized by preparation of a preemulsion followed by final emulsion by using a combined approach of mixing and heating. Labrafac Lipophile WL 1349; a Medium chain triglyceride was used as oil phase, Oleylamine as cationic lipid system and Cremaphor EL, Solutol HS 15 and Hydroxy Propyl methyl cellulose were used as the stabilizer surfactant systems. 0.2% w/w Loteprednol etabonate drug was incorporated in the optimised emulsion and the emulsion was high speed homogenised. The cationic submicron emulsion was evaluated for its pH, globule size, viscosity, zeta potential, osmolarity, drug content, stability and anti-inflammatory efficacy in moderate evaporative dry eye rabbit models against marketed eyedrops; Loteflam®(0.5% w/w Loteprednol etabonate). A stable cationic submicron emulsion containing 0.2% w/w Loteprednol etabonate with pH 7.22, globule size of 978 nm, viscosity of 2.41 cps, zeta potential of + 67.4 mV, osmolarity of 286 milliOsms, drug content of 94% was obtained which was found to have comparable anti-inflammatory efficacy as marketed Loteflam® (0.5% w/w Loteprednol etabonate) eye drops at a lower drug concentration when evaluated in moderate evaporative dry eye rabbit models. Conclusion: High speed homogenisation was found to yield a stable cationic submicron emulsion exhibiting  anti-inflammatory efficacy comparable to marketed formulation but at lower concentration in keratoconjunctivitis sicca.