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 compositions of microparticle formulations called LIQ865. Population pharmacokinetic-pharmacodynamic models were fitted to plasma concentration-effect-time data using non-linear mixed-effects modeling. 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 bupivacaine clearance at higher doses. Bupivacaine clearance and the transit rate constant describing the slow absorption process both decreased with increasing doses following a power function with a shared covariate effect of dose on the two parameters. 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 anesthetics.