Drug delivery to the posterior segment of the eye is important for potentially treating various disorders in retina, choroid, vitreous humor and optic nerve. Due to anatomic membrane barriers and the lacrimal drainage it can be quite challenging to obtain therapeutic drug concentrations in the posterior parts of the eye after topical drug administration. Since the membrane barriers cannot be altered with non-invasive methods invasive methods such as direct drug injection into the vitreous humor and subconjunctival, subtenons capsule or suprascleral injections are gaining popularity. However, invasive methods can cause discomfort for the patient and can also lead to complications that are even more serious than the disease being treated. Alternatively, novel ophthalmic formulations can be developed that specifically target topical drug delivery to the posterior segment of the eye. Anatomical and physiological barriers in the eye are reviewed as well as the theoretical model of passive drug diffusion from the eye surface into the eye. It is shown that enhanced drug delivery through conjunctiva/sclera to retina can be obtained by formulating lipophilic drugs as hydrophilic drug/cyclodextrin complex solutions. Optimization of the delivery system by formulating the drug as a low-viscosity aqueous drug/cyclodextrin complex suspension results in sustained high concentrations of dissolved drug in the tear fluid which further increases the targeted drug delivery to the posterior segment.