The present study examined the feasibility of liposome-mediated gene transfer via nasal administration, for treating insulin-dependent diabetes mellitus. The rat insulin gene was packed under control of the CMV promoter, complexed with DC-chol/DOPE-based liposomes and administered daily via the nasal route in mice made severely diabetic by streptozocin. Sustained expression of the insulin gene was achieved and insulinopenia, ketonuria and death were prevented. Hyperglycemia and body weight reduction were significantly suppressed without evidence of hypoglycemia throughout the experimental period. RT-PCR and FISH analysis indicated that insulin was produced in the alveolar epithelial cells of the lung. Liposome-mediated in vivo gene transfer via nasal administration may provide an efficacious route for delivery of hormonal and other gene products into the blood stream.