The objective of this study was to develop a population pharmacokinetic-pharmacodynamic model of subcutaneously administered bupivacaine in a novel extended-release microparticle formulation for postoperative pain management. Bupivacaine was administered subcutaneously in the lower leg to 28 healthy male subjects in doses from 150 to 600 mg in a phase 1 randomized, placebo-controlled, double-blind, dose-ascending study with two different microparticle formulations, LIQ865A and LIQ865B. Warmth detection threshold was used as a surrogate pharmacodynamic endpoint. Population pharmacokinetic-pharmacodynamic models were fitted to plasma concentration-effect-time data using non-linear mixed-effects modelling. The pharmacokinetics were best described by a two-compartment model with biphasic absorption as two parallel absorption processes: a fast, zero-order process and a slower, first-order process with two transit compartments. The slow absorption process was found to be dose-dependent and rate-limiting for elimination at higher doses. Apparent bupivacaine clearance and the transit rate constant describing the slow absorption process both appeared to decrease with increasing doses following a power function with a shared covariate effect. The pharmacokinetic-pharmacodynamic relationship between plasma concentrations and effect was best described by a linear function. This model gives new insight into the pharmacokinetics and pharmacodynamics of microparticle formulations of bupivacaine and the biphasic absorption seen for several local anaesthetics.