The interaction of liposomes with macrophage cells was monitored by a new fluorescence method (Hong, K., Straubinger, R.M. and Papahadjopoulos, D., J. Cell Biol. 103 (1986) 56a) that allows for the simultaneous monitoring of binding, endocytosis, acidification and leakage. Profound differences in uptake, cell surface-induced leakage and leakage subsequent to endocytosis were measured in liposomes of varying composition. Pyranine (1-hydroxypyrene-3,6,8-trisulfonic acid, HPTS), a highly fluorescent, water-soluble, pH sensitive dye, was encapsulated at high concentration into the lumen of large unilamellar vesicles. HPTS exhibits two major fluorescence excitation maxima (403 and 450 nm) which have a complementary pH dependence in the range 5–9: the peak at 403 nm is maximal at low pH values while the peak at 450 nm is maximal at high pH values. The intra- and extracellular distribution of liposomes and their approximate pH was observed by fluorescence microscopy using appropriate excitation and barrier filters. The uptake of liposomal contents by cells and their subsequent exposure to acidified endosomes or secondary lysosomes was monitored by spectrofluorometry via alterations in the fluorescence excitation maxima. The concentration of dye associated with cells was determined by measuring fluorescence at a pH independent point (413 nm). The average pH of cell-associated dye was determined by normalizing peak fluorescene intensities (403 nm and 450 nm) to fluorescence at 413 nm and comparing these ratios to a standard curve. HPTS-containing liposomes bound to and were acidified by a cultured murine macrophage cell line (J774) with a t 1 2 of 15–20 min. The acidification of liposomes exhibited biphasic kinetics and 50–80% of the liposomes reached an average pH lower than 6 within 2 h. A liposomal lipid marker exhibited a rate of uptake similar to HPTS, however the lipid component selectively accumulated in the cell; after an initial rapid release of liposome contents, 2.5-fold more lipid marker than liposomal contents remained associated with the cells after 5 h. Coating haptenated liposomes with antibody protected liposomes from the initial release. The leakage of liposomal contents was monitored by co-encapsulating HPTS and p-xylene-bis-pyridinium bromide, a fluorescence quencher, into liposomes. The time course of dilution of liposome contents, detected as an increase in HPTS fluorescence, was coincident with the acidification of HPTS. The rate and extent of uptake of neutral and negatively charged liposomes was similar; however, liposomes opsonized with antibody were incorporated at a higher rate (2.9-fold) and to a greater extent (3.4-fold). In addition, the rate and extent of incorporation of liposome encapsulated HPTS was dependent on temperature and the metabolic state of the cell, consistent with uptake of liposomes by endocytosis. The use of HPTS allowed accurate and simultaneous quantitation of liposome uptake, acidification, cell-induced leakage of liposomes, and regurgitation of liposome contents. In addition to cell-surface induced leakage, liposomes leaked extensively during endocytosis coincident with acidification; half of the cell-induced dilution of liposome contents was accounted for by leakage at the cell surface, while the remainder occurred coincident with acidification. Liposome contents labeled the aqueous space of endosomes and lysosomes and were regurgitated rapidly as liposomal lipid accumulated selectively. Opsonization of liposomes, to induce Fc-mediated endocytosis, afforded protection to the initial dilution of liposome contents, but not the rate of leakage, after endocytosis. Implications of these studies for the use of liposomes as drug delivery vehicles are discussed.