Liposomes containing lipid A induced potent humoral immune responses in mice against an encapsulated malaria antigen (R32NS1) containing NANP epitopes. The immune response was not enhanced by lipid A alone or by empty liposomes containing lipid A. Experiments to investigate the adjuvant mechanisms of liposomes and lipid A revealed that liposome-encapsulated R32NS1 was actively presented by bone marrow-derived macrophages to NANP-specific cloned T cells. The degree of presentation was related to the amount of liposomal antigen added per macrophage in the culture medium. At high cell densities, poor presentation occurred when liposomes lacked lipid A but excellent presentation occurred when the liposomes contained lipid A. Liposomes containing lipid A and encapsulated antigen also activated gamma interferon-treated macrophages to produce nitric oxide. Macrophage activation and antigen presentation occurred with liposomes that could not be detected by the Limulus amebocyte lysis assay. Intraperitoneal injection of liposomal lipid A caused a marked increase in the recruitment of immature (peroxidase-positive) macrophages to the peritoneum. On the basis of these experiments, we propose that the mechanism of the adjuvant action of liposomal lipid A is partly due to increased antigen presentation by macrophages and partly due to recruitment of an increased number of macrophages serving as antigen-presenting cells.