Topical ocular conditions such as cornea transplant rejection and keratoconjunctivitis sicca (so called dry eye disease) require therapeutic concentration of immunosuppressant onto the ocular surface for prolonged period. Based on this rational, we optimized cyclosporine A (Cy-A) loaded polymeric mucoadhesive nanoemulsion (Cy-A-mN) with higher Cy-A payload, improved ocular retention, corneal and conjunctival bioavailability. The concentrations of oil, surfactant and co-surfactant needed for the stable nanoemulsion were screened followed by phase behavior study of the formulations components by the construction of pseudo-ternary phase diagrams. The concentration of chitosan was optimized according to the blinking force of eyelids. The size distribution, surface charge, mucoadhesiveness and Cy-A release were studied for Cy-A-mN along with other formulations. The corneal retention of Cy-A-mN was evaluated by gamma scintigraphy, revealing that the clearance was slowest in the case of Cy-A-mN. Biodistribution performed in rabbits showed that Cy-A-mN was able to maintain the therapeutic concentrations (≥50–300ng/g) of Cy-A in the cornea and conjunctiva over the period of 24h. The safety of formulation was confirmed by Draize’s test and by measuring the ocular surface temperature.