The present study aimed at the development and evaluation of tacrolimus gellan gum nanoparticles (TGNPs) for the effective management of dry eye disease (DED) following topical application. TGNPs were developed by ionotropic gelation between gellan gum and aluminum chloride. Developed TGNPs were nanosized (274.46 ± 8.90 nm) with high % encapsulation efficiency (74.2 ± 2.4%) and loading capacity (36.14 ± 1.7%). The nanosize and spherical morphology of TGNPs was confirmed by transmission electron microscopy (TEM) and atomic force microscopy (AFM). Fourier transform infrared spectroscopy (FTIR) revealed no interaction between drug and GG. Differential scanning calorimetry (DSC) and X-ray diffraction (XRD) confirms the conversion of crystalline tacrolimus to amorphous post encapsulation in the nanoparticle. TGNPs showed prolonged drug release throughout 12 h and higher pre-corneal retention compared to tacrolimus solution. HET-CAM studies, histopathological evaluation, and Draize test confirmed the safety of the formulation for ocular use. Further, the pharmacodynamic studies using experimental DED in rabbits showed that TGNPs are effective in treating symptoms of DED. In conclusion, topical delivery of TGNPs could hold potential for efficient management of DED.