Abstract: A liposome composition with enhanced retention on ocular surfaces, for use in ophthalmic drug delivery and dry eye treatment. The liposomes contain about 10-40 mole percent of an amine-derivatized lipid component in which a charged amine group is spaced from a lipid polar head region by a carbon-containing spacer arm at least 3 atoms in length. The liposomes preferably have a close packed lipid structure produced by inclusion of between 20-50 mole percent of cholesterol or an amine-derivatized cholesterol, and/or phospholipids with predominantly saturated acyl chain moieties. The liposomes may be suspended in an aqueous medium containing a high-viscosity polymer, formulated in paste form, or embedded in a polymer matrix, to enhance further the retention of liposomes on a corneal surface.