AIM: To investigate the effects of diquafosol sodium (DQS) for dry eye model induced with povidone-iodine (PI) solution. METHODS: Ten Sprague Dawley rats as the control group. Thirty Sprague Dawley rats were used to establish the dry eye model with stimulation of 10 g/L PI for 14d, then divided rats into three groups: dry eye group with no treatment (DED group, n=10); phosphate buffer saline treated group (PBS group, n=10); diquafosol treated group (DQS group, n=10). Clinical changes were observed by tear production test, fluorescein staining, tear break-up time (TBUT) test, corneal confocal microscope and ocular surface comprehensive analyzer. Eyeballs were collected on day 10 of treatment for hematoxylin-eosin (HE), periodic acid-Schiff (PAS), and alcian blue staining. TUNEL assay, polymorphonuclear (PMN) and mucin 1 (MUC1) immunofluorescence were performed and corneal ultrastructural changes were detected by electron microscopy. RESULTS: Compared with DED and PBS groups, tear production (7.26±0.440 vs 4.07±0.474 mm; 7.26±0.440 vs 3.74±0.280 mm; all P<0.01) and TBUT (7.37±0.383s vs 1.49±0.260s; 7.37±0.383s vs 1.42±0.437s; all P<0.01) were significantly increased in DQS group. HE, PAS, and alcian blue staining and MUC1 immunofluorescence showed mucins and conjunctival goblet cells density (8.45±0.718 vs 5.21±0.813 cells/0.1 mm2; 8.45±0.718 vs 5.36±0.615 cells/0.1 mm2; all P<0.01) increased in DQS group. Confocal microscopy, PMN immunofluorescence and TUNEL staining showed inflammatory infiltration and corneal epithelial cells apoptosis decreased in DQS group. The increased number of microvilli in corneal epithelial and the recovered cell junction were observed in DQS group. CONCLUSION: PI instillation can induce goblet cells and mucin loss, epithelial cell apoptosis and inflammation, which are consistent with the pathological manifestations of dry eye. Diquafosol can repair the ocular surface damage caused by PI, reduce corneal inflammation, inhibit corneal epithelial cell apoptosis, promote mucin secretion and maintain tear film stability.