We attempted to design an ophthalmic in situ gel formulation incorporating disulfiram (DIS) nanoparticles (Dis-NPs/ISG) and demonstrated the therapeutic effect of Dis-NPs/ISG on retinal dysfunction in 15-month-old Otsuka Long-Evans Tokushima Fatty (OLETF) rats, a rat model of diabetes. The DIS particles were crushed using a bead mill to prepare the nanoparticles, and the Dis-NPs/ISG was prepared using a combination of the DIS nanoparticles and an in situ gelling system based on methylcellulose (MC). The particle size of the Dis-NPs/ISG was 80-250 nm, and there was no detectable precipitation or aggregation for 1 month. Moreover, the Dis-NPs/ISG was gelled at 37 °C, and the drug was delivered into the retina by instillation. Only diethyldithiocarbamate (DDC) was detected in the retina (DIS was not detected) when the Dis-NPs/ISG was instilled in the right eye, and the DDC levels in the right retina were significantly higher than those in the left retina. In addition, the retinal residence time of the drug was prolonged by the application of the in situ gelling system, since the DDC levels in the retinas of rats instilled with Dis-NPs/ISG were higher than those in DIS nanoparticles without MC. Furthermore, repetitive instillation of the Dis-NPs/ISG attenuated the deterioration of electroretinograms (ERGs) in 15-month-old OLETF rats by preventing the collapse of ATP production via excessive nitric oxide and recovered the decrease in retinal function. These findings provide important information for the development of novel therapeutic approaches to diabetic retinopathy.