Purpose To evaluate the effect of punctal plugs combined with cyclosporine eye drops on dry eye disease (DED) and ocular surface inflammation. Methods In a clinical trial, 73 patients were randomly allocated into three groups: punctal plug group, combination therapy group, and cyclosporine group. At the baseline and four weeks after treatment, the Schirmer I test score, fluorescein tear film break-up time (FBUT), ocular surface staining score and dry eye symptoms were assessed. Tear samples were collected to detect the level of inflammatory factors (interleukins, matrix metalloproteinase 9 (MMP-9) and tumor necrosis factor alpha (TNF-α)). In an animal experiment, a New Zealand rabbit dry eye model was induced. The rabbits were randomly divided into control group, punctal plug group, and combination therapy group (n = 6). Conjunctival goblet cell density, protein level of MMP-9 in conjunctiva and mRNA levels of inflammatory factors in conjunctiva and cornea were measured before and after treatment. Results In combination therapy group of the clinical trial, the following results were observed: significant improvement in Schirmer I test scores and FBUT compared to the cyclosporine group and punctal plug group, respectively; a decrease in the tear levels of IL-6, IL-1, and MMP-9 compared to the punctal plug group; and a decrease in the tear levels of IL-1α, IL-6, and IL-17 compared to the baseline (all p < 0.05). In the animal experiment, rabbits in combination therapy group had a higher goblet cell density (p < 0.01) and lower mRNA levels of IL-16 (p < 0.05), IL-17 (p < 0.05), and MMP-9 (p < 0.01) in conjunctiva and that of MMP-9 (p < 0.01) in cornea compared to punctal plug group. Conclusion Cyclosporine eye drops combined with degradable punctal plugs is a more optimized clinical treatment strategy for DED compared with degradable punctal plugs or cyclosporine eye drops alone, considering the influence of comprehensive clinical efficacy and ocular surface inflammation.