The purpose of this study was to prepare Eudragit RL 100-based nanoparticles of aceclofenac by nanoprecipitation and evaluate the particle size, zeta potential, drug entrapment, particle morphology; in vitro drug release and in vivo efficacy. Change in drug-polymer ratio from 1:5 to 1:20 increased the particle size and entrapment efficiency. The particles showed sustained in vitro drug release which followed the Higuchi square-root kinetics. The results indicate that the nanoparticles release the drug by a combination of dissolution and diffusion. Based on the particle size (134.97 nm) and entrapment efficiency (95.73%), the formulation made with 1:10 drug-polymer ratio was selected for further studies. The particles were spherical with a polydispersity index of 0.186 and zeta potential of +30.5 mV. Powder X-ray diffraction and differential scanning calorimetry indicated decrease in crystallinity of drug in the nanoparticle formulation. In the in vitro permeation study, the nanoparticle formulation showed 2-fold higher permeation of drug through excised cornea compared to an aqueous solution of drug with no signs of corneal damage. The in vivo studies involving arachidonic acid-induced ocular inflammation in rabbits revealed significantly higher inhibition of polymorphonuclear leukocytes migration (p<0.05) and lid closure scores by the nanoparticle formulation compared with the aqueous solution. The formulation was quite stable to ensure two year shelf life at room temperature.