MOTIVATION: Intercellular communication (i.e. cell-cell communication) plays an essential role in multicellular organisms coordinating various biological processes. Previous studies discovered that feedback loops between two cell types are a widespread and vital signaling motif regulating development, regeneration and cancer progression. While many computational methods have been developed to predict cell-cell communication based on gene expression datasets, these methods often predict one-directional ligand-receptor interactions from sender to receiver cells and are not suitable to identify feedback loops. RESULTS: Here, we describe ligand-receptor loop (LRLoop), a new method for analyzing cell-cell communication based on bi-directional ligand-receptor interactions, where two pairs of ligand-receptor interactions are identified that are responsive to each other and thereby form a closed feedback loop. We first assessed LRLoop using bulk datasets and found our method significantly reduces the false positive rate seen with existing methods. Furthermore, we developed a new strategy to assess the performance of these methods in single-cell datasets. We used the between-tissue interactions as an indicator of potential false-positive prediction and found that LRLoop produced a lower fraction of between-tissue interactions than traditional methods. Finally, we applied LRLoop to the single-cell datasets obtained from retinal development. We discovered many new bi-directional ligand-receptor interactions among individual cell types that potentially control proliferation, neurogenesis and/or cell fate specification. AVAILABILITY AND IMPLEMENTATION: An R package is available at https://github.com/Pinlyu3/LRLoop. The source code can be found at figshare (https://doi.org/10.6084/m9.figshare.20126138.v1). The datasets can be found at figshare (https://doi.org/10.6084/m9.figshare.20126021.v1). SUPPLEMENTARY INFORMATION: Supplementary data are available at Bioinformatics online.