Various vesicle structures and lipid compositions have been studied to identify the optimal type of liposome for delivery of the macrophage-activating agent muramyl dipeptide (MDP) to macrophages. Evaluation of the ability of liposomes to be phagocytosed by macrophages established that optimal initial rates of engulfment were obtained when multilamellar vesicles (MLV) composed of distearoylphosphatidylcholine (18:0 PC): phosphatidylserine (PS) (7:3 mol ratio) were used. MLV composed exclusively of 18:0 PC were phagocytosed at rates greater than or equal to those of MLV composed of egg phosphatidylcholine (PC):PS, whereas MLV composed only of egg PC were very poorly phagocytosed. Although phagocytosis was enhanced by incorporation of PS into MLV, the inclusion of PS brought about significant enhancement in liposome permeability in the presence of serum. The inclusion of PS, however, was a requirement for the delivery of MLV to the lungs following i.v. injection into mice whether used in conjunction with 18:0 PC or egg PC. Activation of macrophages to become tumoricidal against syngeneic tumor cells wtih liposome-encapsulated MDP was superior in both degree and duration when MLV composed of 18:0 PC:PS (7:3 mol ratio) were used. MLV were found to be superior to large unilamellar vesicles containing equal amounts of lipid and entrapped MDP. On the other hand, higher levels of macrophage activation were obtained when an equivalent amount of a lipophilic MDP derivative, muramyltripeptide:phosphatidylethanolamine, was incorporated into the liposome bilayer irrespective of whether the adjuvant was incorporated in liposomes composed of 18:0 PC:PS or egg PC:PS.