Vasoactive intestinal peptide (VIP), a 28 amino-acid peptide was labeled with 131I and encapsulated into liposomes. 131I-VIP or liposomal 131I-VIP was administered intravenously into the rats. The distribution was studied by a gamma camera and established by counting the radioactivity in the removed organs. The elimination half-life for the liposomal 131I-VIP in both blood and lungs was significantly longer (5.29 and 9.28 min, respectively) than that obtained after the administration of 131I-VIP (0.62 and 3.18 min, respectively). Dynamic scans using a gamma camera after the administration of liposomal 131I-VIP showed a higher uptake of the liposomal form into the lungs compared with 131I-VIP. The lack of VIP in asthmatics has been shown in previous studies. However, the clinical investigations using VIP were disappointing most probably due to the rapid degradation of the peptide in the bronchial tract. This in fact is supported by our previous study, in which we demonstrated that VIP had a half-life of 0.45 min in blood. We conclude that the encapsulation of VIP in liposomes prolongs its elimination half-life in plasma and enhances its uptake in lungs. This observation may increase the clinical use of VIP in both diagnostic and therapy.