We have investigated the ability of liposomes containing a lipophilic muramyl dipeptide, N-acetylmuramyl-L-alanyl-D-isoglutamine glycerol dipalmitate (MDP-GDP) to activate Kupffer cell tumoricidal activity in situ and to inhibit the growth of experimental hepatic micrometastases of tumor cell line H-59, a liver-homing variant of the Lewis lung carcinoma. Liposomes prepared from distearoylphosphatidylcholine/dimyristoylphosphatidylglycerol (DSPC/DMPG) and containing MDP-GDP (1 mumol and 2 micrograms, respectively) were efficiently taken up by the liver after i.v. administration. A single i.v. injection of DSPC/DMPG liposomes containing MDP-GDP was capable of inducing Kupffer cell tumoricidal activity against H-59 tumor cells as measured in vitro. Control liposomes or 100 micrograms free MDP were ineffective in inducing Kupffer cell tumoricidal activity in situ. Two treatment regimens were evaluated in vivo: firstly, C57BL/6 mice were injected with tumor cell line H-59 and subsequently treated with multiple injections of liposomal MDP-GDP. Secondly, treatment with liposomal MDP-GDP was initiated prior to tumor cell injection and continued after tumor cell injection. The ability of liposomes containing MDP-GDP to reduce the number of hepatic micrometastases using the first protocol was related to the tumor cell inoculum, significant inhibition being observed at lower liver tumor burdens (less than 25 tumor nodules). Pretreatment of the mice prior to tumor cell challenge followed by treatment afterwards greatly enhanced the efficacy of liposomal MDP-GDP and brought about a highly significant inhibition of the growth of experimental metastases even at high liver tumor burdens (greater than 50 nodules).