In the present study, erythromycin (EM)-loaded nanostructured lipid carriers (NLCs) were prepared by the emulsification and ultra-sonication method. EM-NLCs were optimized by central composite design using the lipid (A), pluronic F127 (B) and sonication time (C) as independent variables. Their effects were evaluated on particle size (Y) and entrapment efficiency (Y). The optimized formulation (EM-NLCs-opt) showed a particle size of 169.6 ± 4.8 nm and entrapment efficiency of 81.7 ± 1.4%. EM-NLCs-opt further transformed into an in-situ gel system by using the carbopol 940 and chitosan blend as a gelling agent. The optimized EM-NLCs in situ gel (EM-NLCs-opt-IG4) showed quick gelation and were found to be stable for more than 24 h. EM-NLCs-opt-IG4 showed prolonged drug release compared to EM in situ gel. It also revealed significant high permeation (56.72%) and flux (1.51-fold) than EM in situ gel. The irritation and hydration study results depicted no damage to the goat cornea. HET-CAM results also confirmed its non-irritant potential (zero score). EM-NLCs-opt-IG4 was found to be isotonic and also showed significantly ( < 0.05) higher antimicrobial activity than EM in situ gel. The findings of the study concluded that NLCs laden in situ gel is an alternative delivery of erythromycin for the treatment of bacterial conjunctivitis.