ABSTRACT Purpose To investigate the efficacy of RSH-12, a novel selective matrix metalloproteinase 9 (MMP-9) inhibitor peptide in rabbit models of dry eye syndrome (DES). Methods In vitro toxicity of RSH-12 on cultured human corneal fibroblasts was investigated with MTT. Ocular toxicity of RSH-12 was investigated by clinical examinations, histology, and TUNEL assay. Experimental model of dry eye was induced by 1.0% atropine sulfate administration followed after 15 min by treatment with PBS, RSH-12, and Restasis in individual groups, three times a day for 7 days. In addition to performing Schirmer’s test for evaluating basic tear secretion and tear break-up time test for investigating tear stability, the occurrence of superficial punctate keratopathy was also investigated in the study groups. Results MTT assay demonstrated that RSH-12 was not toxic to human corneal fibroblasts in different concentrations. During the administration of atropine, TBUT values and tear volume were decreased in vehicle group while these indices improved significantly in groups treated with RSH-12 in a promising manner. RSH-12 increased the mean value of tear volume from 4.85 to 10.75 mm (P = .0001) and mean of TBUT values from 20.3 s to 34.5 s (P = .0001) compared with the vehicle. In contrast to the presence of severe superficial punctate keratopathy in the controls, no significant dotted staining was observed in the RSH-12 and Restasis groups. Conclusions These outcomes propose that RSH-12 has a therapeutic effect in the rabbit model of dry eye and might be a potential treatment for severe DES.