Administering liposome-encapsulated drugs by aerosol is a feasible way of targeting drugs to the lungs. Prior to clinical application of aerosolized liposomes as drug carriers, their relative safety must be established. We evaluated the effects of inhaling nondrug-containing liposomes (15 and 150 mg of lipid per milliliter) for 1 h on pulmonary function and on oximetry in ten healthy nonsmoking volunteers. Spirometry was performed prior to and at intervals after inhalation, and subjects were monitored with pulse oximetry. Liposome inhalation was well tolerated, and no oxygen desaturation, decrements in pulmonary function, or side effects were noted. We conclude that inhalation of small particle aerosols of SPC liposomes produces no acute deleterious effects on pulmonary function in healthy subjects.