Controlled release coatings were developed for neuroprostheses with the aim of combating the tissue reaction following implantation in the brain. The coatings consist of poly(propylene sulfide) drug-eluting nanoparticles embedded in a poly(ethylene oxide) matrix. The nanoparticles are loaded with dexamethasone, an anti-inflammatory drug known to have an effect on the cells activated during the damage caused by implantation. The nanoparticles are not affected by the coating process and the drug remains bioactive after it is released. The coating was applied to microfabricated cortical neuroprostheses consisting of platinum and polyimide. Coated drug-eluting devices were implanted in the cortex of rats. After implantation the matrix dissolves, exposing the electrode surfaces, while the nanoparticles remain in the vicinity of the tissue–implant interface. Using electrical impedance spectroscopy and comparative histology, a long-term decrease in the tissue response in comparison to control devices was observed. These coatings can therefore be used to increase the reliability and long-term efficacy of neuroprostheses.