We have reported previously that a basic peptide, arginine peptide, can be used as an efficient system for delivery of foreign genes. In this work, to better understand the mechanism of arginine peptide-mediated gene delivery, we further evaluated the process of cellular uptake and nuclear localization of the peptide/DNA complex. To investigate the effect of cellular proteoglycans on arginine peptide/DNA complexes, interactions between polyanionic glycosaminoglycans (GAGs) and peptide/DNA complexes were examined by the ethidium bromide interaction assay. Sulfated GAGs were found to relax the complexed DNA at low peptide/DNA charge ratios. Condensed peptide/DNA complexes facilitate cellular uptake, but their mechanism of uptake is poorly understood. Studies of various endocytosis inhibitors suggested that the peptide/DNA complex internalization involved the caveolar-related endocytosis pathway. A critical step in the gene delivery is the cytosol-to-nucleus transport of exogenous DNA following initial complex uptake. Nuclear localization of peptide/DNA complex was confirmed by confocal laser scanning microscopic observation. Further, we show that transfections with peptides result in an early accumulation of plasmid DNA in the nucleus of growth-arrested cells, which suggest nuclear transport. To assess the potential for arginine peptide as an agent for therapeutic gene delivery, in vivo complexed DNA transduction studies were performed. Mice were injected subcutaneously with the reporter gene beta-galactosidase, resulting in high levels of gene expression in dermal tissue.