Interleukin-2 was entrapped in liposomes (Lip-IL-2) and injected into rats. The intraperitoneal injection of Lip-IL-2 into rats bearing an ascites-forming rat hepatoma (AH-66) significantly increased the survival time when compared with rats administered free IL-2 or saline-containing liposomes. The number of peritoneal exudate cells (PEC) increased markedly after intraperitoneal injection of Lip-IL-2 and consisted mainly of macrophages. The level of tumor necrosis factor alpha (TNF-alpha) and the intensity of free radicals increased in the ascites at 48 hrs after Lip-IL-2 administration, whereas TNF-alpha was not detected and the intensity of free radicals did not increase after free IL-2 administration. Our findings suggested that entrapment of IL-2 into liposomes enhanced its potential for cancer therapy, presumably by activating macrophages to produce TNF-alpha and free radicals.