The present study aimed to prepare a chemically and physically stable formulation of doxycycline (Doxy) in an in situ thermally sensitive hydrogel for ophthalmic delivery. An inclusion complex of Doxy and hydroxypropyl-β-cyclodextrin (HP-β-CD) was first developed to increase the stability of Doxy in aqueous solution. The physical characteristics (phase solubility profiles, thermal analysis, X-ray powder diffractograms and infrared spectra) of the Doxy-HP-β-CD inclusion complex indicated the formation of a stable 1:1 complex. Poloxamers P407 (16–22%) and P188 (0–5%) were mixed to obtain a hydrogel with an appropriate gelation temperature for opthalmic use. Formulation of the inclusion complex in the poloxamer hydrogel exhibited a suitable gelation temperature (33.3 °C) after dilution with simulated tear fluid (Gel:STF=40:7, v/v). The release of Doxy from the poloxamer hydrogel followed a zero order equation suggesting it occurs through corrosion of the poloxamer hydrogel. Stability studies demonstrated that the inclusion of Doxy by HP-β-CD markedly improved its stability in aqueous solution both at 8 and 40 °C. This formulation of a doxycycline-HP-β-CD inclusion complex in an in situ thermally sensitive poloxamer hydrogel represents a potentially effective ophthalmic Doxy delivery system.