Purpose To evaluate the safety and toxicity profile of a chitosan (CS) and poly(lactic-co-glycolic) acid (PLGA)-based sustained release methotrexate (MTX) intravitreal micro-implant in normal rabbit eyes using non-invasive testing that included electroretinography (ERG), ultrasound biomicroscopy (US), slit-lamp biomicroscopy (SLB), funduscopy, and intraocular pressure (IOP). Methods PLGA-coated CS-based micro-implants containing 400 μg of MTX and placebo (without drug) micro-implants were surgically-implanted in the vitreous of the right and the left eyes, respectively, in each of the thirty New Zealand rabbits. ERG, US, SLB, funduscopy, and IOP were assessed in both eyes at pre-determined time points (days: 1, 3, 7, 14, 28 and 56). The safety of micro-implants was assessed by analyzing the ERG data using different statistical models, to quantify and compare the functional integrity of the retina. Further, US, funduscopy, SLB and IOP determined the condition of the retina, the micro-implant and associated intraocular features. Results Statistical analyses of the ERG data showed unchanged functional integrity of retina between eyes with the PLGA-coated CS-based MTX micro-implant and the placebo micro-implant. US analysis showed that micro-implants were stationary throughout the study. SLB, funduscopy and IOP further confirmed that there were no abnormalities in the intraocular physiology. Conclusion The findings from ERG, US, SLB, funduscopy, and IOP showed no detectable adverse effects caused by our biodegradable micro-implants. These non-invasive techniques appeared to show lack of significant ocular toxicity over time in spite of degradation and changes in morphology of the micro-implants following intraocular implantation.