Liposomal vectors formulated with cationic lipids (cationic liposomes) and fusogenic dioleoylphosphatidylethanolamine (DOPE) have potential for modulating the immune system by delivering gene or antisense oligonucleotide inside immune cells. The toxicity and the immunoadjuvant activity of cationic liposomes containing nucleic acids toward immune effector cells has not been investigated in detail. In this report, we have evaluated the toxicity of liposomes formulated with various cationic lipids towards murine macrophages and T lymphocytes and the human monocyte-like U937 cell line. The effect of these cationic liposomes on the synthesis of two immunomodulators produced by activated macrophages, nitric oxide (NO) and tumor necrosis factor-alpha (TNF-alpha), has also been determined. We have found that liposomes formulated from DOPE and cationic lipids based on diacyltrimethylammonium propane (dioleoyl-, dimyristoyl-, dipalmitoyl-, disteroyl-: DOTAP, DMTAP, DPTAP, DSTAP) or dimethyldioctadecylammonium bromide (DDAB) are highly toxic in vitro toward phagocytic cells (macrophages and U937 cells), but not towards non-phagocytic T lymphocytes. The rank order of toxicity was DOPE/DDAB > DOPE/DOTAP > DOPE/DMTAP > DOPE/DPTAP > DOPE/DSTAP. The ED50's for macrophage toxicity were < 10 nmol/ml for DOPE/DDAB, 12 nmol/ml for DOPE/DOTAP, 50 nmol/ml for DOPE/DMTAP, 400 nmol/ml for DOPE/DPTAP and > 1000 nmol/ml for DOPE/DSTAP. The incorporation of DNA (antisense oligonucleotide or plasmid vector) into the cationic liposomes marginally reduced their toxicity towards macrophages. Although toxicity was observed with cationic lipids alone, it was clearly enhanced by the presence of DOPE. The replacement of DOPE by dipalmitoylphosphatidylcholine (DPPC) significantly reduced liposome toxicity towards macrophages, and the presence of dipalmitoylphosphatidylethanolamine-PEG2000 (DPPE-PEG2000: 10 mol%) in the liposomes completely abolished this toxicity. Cationic liposomes, irrespective of their DNA content, downregulated NO and TNF-alpha synthesis by lipopolysaccharide (LPS)/interferon-gamma (IFN-gamma)-activated macrophages. The replacement of DOPE by DPPC, or the addition of DPPE-PEG2000, restored NO and TNF-alpha synthesis by activated macrophages. Since macrophages constitute the major site of liposome localization after parenteral administration and play an important role in the control of the immune system, cationic liposomes should be used with caution to deliver gene or antisense oligonucleotide to mammalian cells. Cationic lipids show in vitro toxicity toward phagocytic cells and inhibit in vitro and in situ NO and TNF-alpha production by activated macrophages.