Methods of forming cyclosporin/cyclodextrin complex nanoparticles and microparticles, and administration of the nano- and microsuspension formed to an eye of a human or animal in the form of aqueous eye drops suitable to elicit or enhance tear formation and for treatment of diseases of the eye and surrounding areas. The aqueous eye drop composition contains cyclosporin and a mixture of α-cyclodextrin and γ-cyclodextrin as well as one or more stabilizing polymers. α-Cyclodextrin solubilizes cyclosporin while γ- cyclodextrin promotes formation of cyclosporin/cyclodextrin complex aggregates. The polymers stabilize the aqueous nano- and microsuspension.