Chitosan microparticles (CMPs) have previously been developed for topical applications to the eye, but their safety and efficacy in delivering proteins to the retina have not been adequately evaluated. This study examines the release kinetics of CMPs in vitro, and assesses their biocompatibility and cytotoxicity on retinal cells in vitro and in vivo. Two proteins were used in the encapsulation and release studies: BSA (bovine serum albumin) and tat-EGFP (enhanced green fluorescent protein fused to the transactivator of transcription peptide). Not surprisingly, the in vitro release kinetics were dependent on the protein encapsulated, with BSA showing higher release than tat-EGFP. CMPs containing encapsulated tat-EGFP were tested for cellular toxicity in photoreceptor-derived 661W cells. They showed no signs of in vitro cell toxicity at a low concentration (up to 1mgml⁻¹), but at a higher concentration of 10mgml⁻¹ they were associated with cytotoxic effects. In vivo, CMPs injected into the subretinal space were found beneath the photoreceptor layer of the retina, and persisted for at least 8weeks. Similar to the in vitro studies, the lower concentration of CMPs was generally well tolerated, but the higher concentration resulted in cytotoxic effects and in reduced retinal function, as assessed by electroretinogram amplitudes. Overall, this study suggests that CMPs are effective long-term delivery agents to the retina, but the concentration of chitosan may affect cytotoxicity.