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Retinal Müller glia function as injury-induced stem-like cells in zebrafish but not mammals. However, insights gleaned from zebrafish have been applied to stimulate nascent regenerative responses in the mammalian retina. For instance, microglia/macrophages regulate Müller glia stem cell activity in the chick, zebrafish, and mouse. We previously showed that post-injury immunosuppression by the glucocorticoid dexamethasone accelerated retinal regeneration kinetics in zebrafish. Similarly, microglia ablation enhances regenerative outcomes in the mouse retina. Targeted immunomodulation of microglia reactivity may therefore enhance the regenerative potential of Müller glia for therapeutic purposes. Here, we investigated potential mechanisms by which post-injury dexamethasone accelerates retinal regeneration kinetics, and the effects of dendrimer-based targeting of dexamethasone to reactive microglia. Intravital time-lapse imaging revealed that post-injury dexamethasone inhibited microglia reactivity. The dendrimer-conjugated formulation: (1) decreased dexamethasone-associated systemic toxicity, (2) targeted dexamethasone to reactive microglia, and (3) improved the regeneration enhancing effects of immunosuppression by increasing stem/progenitor proliferation rates. Lastly, we show that the gene rnf2 is required for the enhanced regeneration effect of D-Dex. These data support the use of dendrimer-based targeting of reactive immune cells to reduce toxicity and enhance the regeneration promoting effects of immunosuppressants in the retina.