Multivesicular liposomes (MVLs) have been widely studied for encapsulation of hydrophilic drugs due to their structural properties and large aqueous inner cavities. In this study, to investigate MVLs and their potential application for incorporation of hydrophobic drugs, new drug delivery system for fluocinolone acetonide (FA), as a lipophilic model drug, was developed combining the advantages of cyclodextrin inclusion complexes (CD-IC) and multivesicular liposomes. FA was complexed with several CDs to form inclusion complex (FA-CD-IC) and then FA-CD-IC was incorporated into MVLs by reverse-phase evaporation method. Physicochemical characterization of drug-CD-IC, at a molar ratio of 1:1 (drug to CD) was studied using HNMR, FT-IR, DSC and UV spectroscopy. The influence of various types of CDs on the aqueous solubility of FA, encapsulation efficiency and release profile in MVLs was studied. The results revealed the formation of inclusion complexes between the drug and CDs. Both the CD's type and proportion played an important role in the physicochemical properties of the systems. The inclusion complex of the drug with hydroxypropyl-β-cyclodextrin exhibited the most appropriate loading and sustained-release profile over prolonged periods. The results reveal the promising potential of MVLs as a stable drug delivery system to release the drug in a sustained manner for the treatment of ocular inflammatory disease.