We describe a simple method for constructing a micellar supramolecular hydrogel, composed of a low-molecular-weight methoxy poly(ethylene glycol) (Mn=2000 Da) block polymer and alpha-cyclodextrin (alpha-CD), for topical ocular drug delivery. Adding aqueous block polymer micelles into an alpha-CD aqueous solution resulted in the formation of a micellar supramolecular hydrogel through host-guest inclusion. The effects of the drug payload, block polymer and alpha-CD concentrations and the block polymer structure on gelation time were investigated. The resultant micellar supramolecular hydrogels were thoroughly characterized by X-ray diffraction, rheological studies, and scanning electron microscopy. The hydrogels exhibited thixotropic properties, which are beneficial to ocular drug delivery. In vitro release studies indicated that the alpha-CD concentration strongly influenced the rate of release of diclofenac, used as a model hydrophobic ocular drug. The hydrogels showed relatively low cytotoxicity towards L-929 and HCEC cells and did not affect the migration of the latter after 24 h incubation. The hydrogel was nonirritant towards the rabbit eye, as indicated by the Draize test, fluorescein staining, and histological observation. Nile Red-labeled micellar supramolecular hydrogel showed that it could significantly extend the retention time on the corneal surface in rabbits, compared with a plain micellar formulation. In vivo pharmacokinetics indicated that the hydrogel could greatly improve ocular drug bioavailability, compared with the micellar formulation. Our results suggest that the micellar supramolecular hydrogel is a promising system for ocular drug delivery.