The cellular uptake of liposomes is generally believed to be mediated by adsorption of liposomes onto the cell surface and subsequent endocytosis. This report examines the effect of liposome surface charge on liposomal binding and endocytosis in two different cell lines: a human ovarian carcinoma cell line (HeLa) and a murine derived mononuclear macrophage cell line (J774). The large unilamellar liposomes were composed of 1, 2-dioleolyl-sn-glycero-3-phosphatidylcholine with and without the addition of either a positively charged lipid, 1, 2-dioleoyl-3-dimethylammonium propanediol (DODAP), or a negatively charged lipid, 1,2-dioleolyl-sn-glycero-3-phosphatidylserine. In some experiments 5 mol % of the anionic PEG2000-PE or a neutral PEG lipid of the same molecular weight was added. HeLa cells were found to endocytose positively charged liposomes to a greater extent than either neutral or negatively charged liposomes. This preference was not lipid-specific since inclusion of a cationic cyanine dye, DiIC18(3), to impart positive charge in place of DODAP resulted in a similar extent of endocytosis. In contrast the extent of liposome interaction with J774 cells was greater for both cationic and anionic liposomes than for neutral liposomes. The greater uptake of positively charged liposomes by HeLa cells was also observed with sterically stabilized liposomes (PEG liposomes). Although the overall amount of endocytosis for all the PEG liposomes examined was attenuated relative to conventional liposomes, the extent of endocytosis was greatest for positively charged PEG liposomes, whereas negatively charged PEG2000-PE liposomes were hardly endocytosed by the HeLa cells. Incorporation of a neutral PEG lipid into liposomes permits the independent variation of liposome steric and electrostatic effects in a manner that may allow interactions with cells of the reticuloendothelial system to be minimized, yet permit strong interactions between liposomes and proliferating cells.