Fungal corneal ulcers, also known as keratomycosis, occur due to a breach in the corneal epithelium. According to WHO, it is the leading cause of blindness. The eye consists of a variety of different structures having different physiological functions that make it highly resistant to external substances, thus resulting in low bioavailability of drugs from most of the conventional dosage forms. To improve drug effectiveness, a series of research groups have tried a variety of strategies. The majority of these modifications provide some benefit over traditional dosage forms, but they have their own set of drawbacks. To overcome the side effects of the formulations mentioned above, Fluconazole-loaded elastic liposome-based gel was prepared. The elastic liposomes were prepared by rotary evaporation method using soya lecithin and sodium deoxycholate. The elastic liposomal suspension was then incorporated into optimised gelling agent (carbopol 934) to have sufficient contact time of the drug in the eye. The elastic liposome-based gel was then characterized for pH, drug content, rheological study, homogeneity and grittiness, in vitro release study, ex vivo permeation study, toxicity study, bio adhesion study and antifungal activity. The optimized formulation had pH 7.0 ± 0.01, drug content 98.5 ± 3.9%, viscosity 7217 ± 340 mPa.s, in vitro release 80.5± 0.32%, ex vivo permeation 72.27±0.65 % and the bio adhesion time of the optimized formulation was found to be significantly higher (p≤ 0.05) as compared to marketed gel. Antifungal activity of the optimized gel was also found to be significantly higher (p≤ 0.05) as compared to the marketed gel. The Fluconazole-loaded elastic liposome gel was prepared successfully and was found to be a good choice over conventional gel formulation for the treatment of keratomycosis. Key Words: Fungal corneal ulcers