Anti-vascular endothelial growth factor agents have been widely used to treat several eye diseases including age-related macular degeneration (AMD). An approach to maximize the local concentration of drug at the target site and minimize systemic exposure is to be sought. Sunitinib malate, a multiple receptor tyrosine kinase inhibitor was encapsulated in poly(lactic-co-glycolic acid) nanoparticles to impart sustained release. The residence time in vitreal fluid was further increased by incorporating nanoparticles in thermo-reversible gel. Nanoparticles were characterized using TEM, DSC, FTIR, and in vitro drug release profile. The cytotoxicity of the formulation was assessed on ARPE-19 cells using the MTT assay. The cellular uptake, wound scratch assay, and VEGF expression levels were determined in in vitro settings. The optimized formulation had a particle size of 164.5 nm and zeta potential of − 18.27 mV. The entrapment efficiency of 72.0% ± 3.5% and percent drug loading of 9.1 ± 0.7% were achieved. The viability of ARPE-19 cells was greater than 90% for gel loaded, as such and blank nanoparticles at 10 μM and 20 μM concentration tested, whereas for drug solution viability was found to be 83% and 71% respectively at above concentration. The cell viability results suggest the compatibility of the developed formulation. Evaluation of cellular uptake, wound scratch assay, and VEGF expression levels for the developed formulations indicated that the formulation had higher uptake, superior anti-angiogenic potential, and prolonged inhibition of VEGF activity compared with drug solution. The results showed successful development of sunitinib-loaded nanoparticle-based thermo-reversible gel which may be used for the treatment of neovascular AMD.