The blood residence half-life and organ distribution of recombinant human tumor necrosis factor-alpha (TNF-alpha) encapsulated in sterically stabilized liposomes, were investigated in rats bearing a soft tissue sarcoma in the hind leg. We studied the decay in blood concentration of "empty" liposomes using the aqueous marker 67gallium-desferal, as well as the blood concentration of soluble TNF-alpha and liposome encapsulated TNF-alpha using l25I. Encapsulation efficacy of TNF-alpha was 24%. The pharmacokinetics of TNF-alpha were markedly altered after encapsulation in liposomes, with a 33-fold increase in mean residence time of TNF-alpha in the blood, and a concomitant 14-fold increase in the area under the plasma concentration vs. time curve for liposomal TNF-alpha. Although the liposomes exhibit Stealth characteristics, uptake by mononuclear phagocyte-rich organs (e.g., liver and spleen) was noticeable, especially at later time points. Encapsulation of TNF-alpha in sterically stabilized liposomes resulted in a marked increase in localization of the cytokine in tumor measured as total uptake over time. However, peak TNF-alpha concentration levels in tumor were not significantly enhanced compared with free TNF-alpha. Besides the augmented localization of TNF-alpha after encapsulation in sterically stabilized liposomes, a diminished toxicity was observed.