High-dose glucocorticosteroid hormones are a mainstay in the treatment of relapses in multiple sclerosis. We searched for a way to deliver ultra high doses of glucocorticosteroids to the CNS of rats with experimental autoimmune encephalomyelitis (EAE) using a novel formulation of polyethylene glycol (PEG)-coated long-circulating liposomes encapsulating prednisolone (predni solone liposomes, PL). 3H-labelled PL showed selective targeting to the inflamed CNS, where up to 4.5-fold higher radioactivity was achieved than in healthy control animals. HPLC revealed much higher and more persistent levels of prednisolone in spinal cord after PL compared with an equal dose of free prednisolone. Gold-labelled liposomes could be detected in the target tissue, mostly taken up by macrophages (Mphi), microglial cells and astrocytes. Blood-brain barrier disruption was greatly reduced by 10 mg/kg PL, which was superior to a 5-fold higher dose of free methylprednisolone (MP). PL was also superior to MP in diminishing T-cell infiltration by induction of T-cell apoptosis in spinal cord. Mphi infiltration was clearly decreased only by PL. The percentage of tumour necrosis factor-alpha (TNF-alpha)-positive T cells or Mphi was greatly reduced by PL and by MP. No adverse effects on glial cells were detected. A single injection of PL clearly ameliorated the course of adoptive transfer EAE and EAE induced by immunization. In conclusion, PL is a highly effective drug in treatment of EAE, and is superior to a 5-fold higher dose of free MP, possibly by means of drug targeting. These findings may have implications for future therapy of autoimmune disorders such as multiple sclerosis.