The use of liposome delivery technology to enhance the antiviral activity of poly ICLC (an immunomodulating dsRNA) while decreasing its intrinsic toxicity is evaluated in this study. The antiviral efficacies of free and liposome-encapsulated poly ICLC were evaluated and compared using a lethal respiratory influenza A virus infection in mice. The toxicity profiles of free and liposome-encapsulated poly ICLC were compared by determining the extent of hypothermia and loss in body weights in mice pretreated with these drugs. Poly ICLC was encapsulated in cationic liposomes prepared by the freeze drying method. To determine the antiviral efficacies of free and liposome-encapsulated poly ICLC, mice were intranasally pretreated with two doses of poly ICLC (free or liposomal, 1 mg/kg/dose) given 48 h apart. At various times post pretreatment, mice were intranasally challenged with 10 LD50 mouse-adapted influenza A/PR/8 (H1N1) virus. The survival rates of the mice were determined at day 14 post infected and compared to the untreated control mice. Results indicate mice pretreated with liposome-encapsulated poly ICLC within 3 weeks prior to virus challenge were completely protected (100% survival compared to 0% for the untreated control group, p < 0.001), while window of protection provided by free unencapsulated poly ICLC was 12 days. When the toxicity profiles of free and liposome-encapsulated poly ICLC were compared, it was found that hypothermia and body weight loss induced by poly ICLC were either completely mitigated or significantly reduced in mice given equivalent doses of poly ICLC in the liposome-encapsulated form. These results suggest that liposomes are an excellent drug carrier for poly ICLC, that liposome-encapsulated poly ICLC may provide a safe and effective immunotherapeutic approach for the prevention of respiratory influenza virus infections.