The purpose of this study was to develop a clear aqueous mixed nanomicellar formulation (MNF) of dexamethasone utilizing both D-α-tocopherol polyethylene glycol-1000 succinate (Vit E TPGS) and octoxynol-40 (Oc-40). In this study, Vit E TPGS and Oc-40 are independent variables. Formulations were prepared following solvent evaporation method. A three level full-factorial design was applied to optimize the formulation based on entrapment efficiency, size, and polydispersity index (PDI). A specific blend of Vit E TPGS and Oc-40 at a particular wt% ratio (4.5:2.0) produced excellent drug entrapment, loading, small mixed nanomicellar size and narrow PDI. Solubility of DEX in MNF is improved by ~6.3-fold relative to normal aqueous solubility. Critical micellar concentration (CMC) for blend of polymers (4.5:2.0) was found to be lower (0.012 wt%) than the individual polymers (Vit E TPGS (0.025 wt%) and Oc-40 (0.107 wt%)). No significant effect on mixed nanomicellar size and PDI with one-factor or multi-factor interactions was observed. Qualitative (1)H NMR studies confirmed absence of free drug in the outer aqueous MNF medium. MNF appeared to be highly stable. Cytotoxicity studies on rabbit primary corneal epithelial cells did not indicate any toxicity suggesting MNF of dexamethasone is safe and suitable for human topical ocular drops after further in vivo evaluations.