Vaginal drug delivery is often preferred over systemic delivery to reduce side effects and increase efficacy in treating diseases and conditions of the female reproductive tract (FRT). Current vaginal products have drawbacks, including spontaneous ejection of drug-eluting rings and unpleasant discharge from vaginal creams. Here, we describe the development and characterization of a hypotonic, gel-forming, Pluronic-based delivery system for vaginal drug administration. The rheological properties were characterized with and without common hydrogel polymers to demonstrate the versatility. Both qualitative and quantitative approaches were used to determine the Pluronic F127 concentration below the critical gel concentration (CGC) that was sufficient to achieve gelation when formulated to be hypotonic to the mouse vagina. The hypotonic, gel-forming formulation was found to form a thin, uniform gel layer along the vaginal epithelium in mice, in contrast to the rapidly forming conventional gelling formulation containing polymer above the CGC. When the hypotonic, gel-forming vehicle was formulated in combination with a progesterone nanosuspension (ProGel), equivalent efficacy was observed in the prevention of chemically-induced preterm birth (PTB) compared to commercial Crinone® vaginal cream. Further, ProGel showed marked benefits in reducing unpleasant discharge, reducing product-related toxicity, and improving compatibility with vaginal bacteria in vitro. A hypotonic, gel-forming delivery system may be a viable option for therapeutic delivery to the FRT.