OBJECTIVE To test the hypothesis that liposome encapsulated hemoglobin (LEH), an experimental oxygen-carrying fluid, exacerbates endotoxin-induced lung injury in the rat. METHODS Prospective, randomized animal study. METHODS University animal laboratory. METHODS Anesthetized Sprague-Dawley rats (n = 8-13) were infused with LEH (10% of estimated total blood volume) or vehicle (0.9% NaCl). Thirty minutes later, Escherichia coli endotoxin (3.6 mg/kg, i.v.) or vehicle (0.9% NaCl) was administered, and skeletal muscle oxygen tension as well as lung injury were assessed at 2, 4, and 8 hrs. Oxygen tension was measured using a miniaturized thin film oxygen sensor placed in the rectus abdominis muscle, and lung injury was evaluated by determining lung weights, lung myeloperoxidase activity, lung tissue tumor necrosis factor-alpha level, and protein concentration in bronchoalveolar lavage fluid. RESULTS The intravenous bolus injection of E. coli endotoxin elevated lung water content (33% +/- 5%; p < .01 vs. sham controls), myeloperoxidase activity (56% +/- 6%; p < .01), and tumor necrosis factor-alpha production (1320 +/- 154 pg/g lung tissue; p < .05 vs. undetected levels in sham controls), as well as induced protein accumulation in bronchoalveolar lavage fluid (258% +/- 38%; p < .01) and skeletal muscle hypoxia (52 +/- 8 mm Hg; p < .05). Pretreatment with LEH, which when infused alone did not induce lung injury, had no effect on these responses. CONCLUSIONS In this specific model of endotoxin-induced lung injury, LEH does not exacerbate microvascular leakage and leukosequestration, the hallmarks of adult respiratory distress syndrome.