The phospholipid mediator, platelet activating factor (PAF: 1-O-alkyl-2-O-acetyl-sn-glycero-3-phosphocholine), was recently reported to activate macrophage-monocyte cells as well as neutrophils or platelets. PAF was incorporated into dipalmitoylphosphatidylcholine-cholesterol liposomes, and their effect on guinea pig peritoneal macrophages was examined. PAF incorporated into liposomes was found to activate macrophages much more potently than PAF in the free form, whereas the effect of PAF in liposome on platelets was weaker than that of PAF in the free form. A large difference between PAF in liposomes and PAF in the free form was observed in the rate of degradation of PAF during incubation with macrophages. This rapid degradation of PAF in the free form may partially explain the poor activation by PAF of macrophages.