Corticosteroids inhibit the inflammatory response to a variety of inciting agents and probably delay or slow healing. They inhibit the edema, fibrin deposition, capillary dilation, leukocyte migration, capillary proliferation, fibroblast proliferation, deposition of collagen and scar formation associated with inflammation. There is no generally accepted explanation for the mechanism of action of ocular corticosteroids. However, corticosteroids are thought to act by the induction of phospholipase A2 inhibitory proteins, collectively called lipocortins. It is postulated that these proteins control the biosynthesis of potent mediators of inflammation such as prostaglandins and leukotrienes by inhibiting the release of their common precursor arachidonic acid. Arachidonic acid is released from membrane phospholipids by phospholipase A2. Corticosteroids are capable of producing a rise in intraocular pressure.

Loteprednol etabonate is structurally similar to other corticosteroids. However, the number 20 position ketone group is absent. It is highly lipid soluble which enhances its penetration into cells. Loteprednol etabonate is synthesized through structural modifications of prednisolone-related compounds so that it will undergo a predictable transformation to an inactive metabolite. Based upon in vivo and in vitro preclinical metabolism studies, loteprednol etabonate undergoes extensive metabolism to inactive carboxylic acid metabolites.

Results from a bioavailability study in normal volunteers established that plasma levels of loteprednol etabonate and Δ1 cortienic acid etabonate (PJ 91), its primary, inactive metabolite, were below the limit of quantitation (1 ng/mL) at all sampling times. The results were obtained following the ocular administration of one drop in each eye of 0.5% loteprednol etabonate 8 times daily for 2 days or 4 times daily for 42 days. This study suggests that limited (< 1 ng/ml) systemic absorption occurs with loteprednol etabonate ophthalmic suspension.