From the original concept of encapsulating hemoglobin in an inert shell, LEH has evolved into a fluid proven to carry oxygen, capable of surviving for reasonable periods in the circulation, and amenable to large-scale production. The formula for the outer shell evolved from synthetic, nonlipid materials, to egg-lecithin-based lipid mixtures, to distearoyl-phosphatidylcholine-based blends. The fabrication technology started with the production of milliliter quantities and methods detrimental to the hemoglobin and developed into high-pressure extrusion systems producing multi-liter quantities without damaging the hemoglobin. The development of methods for analysis and quality control of LEH has been difficult: even techniques for measuring basic characteristics of size and methemoglobin are still being standardized. In vivo studies have established that LEH has a circulation half-life of 16-20 hr and can carry oxygen sufficient to sustain life, but safety has yet to be proven. In each of the general areas mentioned above, there are opportunities for further improvement and characterization. The source of the hemoglobin and the coencapsulation of hemoglobin modifiers needs to be reassessed now that human hemoglobin has been cloned and functional hemoglobin can be produced by using fermentation techniques. The development of routine methods for quality control and assurance must accompany the production of large quantities of LEH for preclinical studies. Whether or not the LEH can and should be manufactured as a lyophilized product must be assessed. Animal studies must done to prove safety as well as efficacy in a variety of clinical models, including hemorrhagic and septic shock as well as various levels of isovolemic exchange. One approach toward the improvement of the LEH is to alter the liposome surface to increase its biocompatibility. The evolution of biocompatible liposome surfaces has included carbohydrate moieties, as carbohydrates are expressed on the majority of biological membrane surfaces including the red cell. It has been demonstrated that inclusion of carbohydrate components such as gangliosides into the liposomal bilayer results in increased circulation times. As a result, these ganglioside-containing liposomes may exhibit a reduced impact on the RES system. Goins et al. have examined methods of introducing the ganglioside GM1 into LEH preparations. The long-term preservation of LEH is essential for its use by paramedics both in civilian and military trauma settings.(ABSTRACT TRUNCATED AT 400 WORDS)