A polymer-grafted liposomal formulation that has the potential to be developed for aerosolic pulmonary delivery of vasoactive intestinal peptide (VIP), a potent vasodilatory neuropeptide, is described. As VIP is prone to rapid proteolytic degradation in the microenvironment of the lung a proper delivery system is required to increase the half-life and bioavailability of the peptide. Here we investigate structural parameters of unilamellar liposomes composed of palmitoyl-oleoyl-phosphatidylcholine, lyso-stearyl-phosphatidylglycerol and distearyl-phosphatidyl-ethanolamine covalently linked to polyethylene glycol 2000, and report on VIP-lipid interaction mechanisms. We found that the cationic VIP is efficiently entrapped by the negatively charged spherical liposomes and becomes converted to an amphipathic alpha-helix. By fluorescence spectroscopy using single Trp-modified VIP we could show that VIP is closely associated to the membrane. Our data suggest that the N-terminal random-coiled domain is embedded in the interfacial headgroup region of the phospholipid bilayer. By doing so, neither the bilayer thickness of the lipid membrane nor the mobility of the phospholipid acyl chains are affected as shown by small angle X-ray scattering and electron spin resonance spectroscopy. Finally, in an ex vivo lung arterial model system we found that liposomal-associated VIP is recognized by its receptors to induce vasodilatory effects with comparable high relaxation efficiency as free VIP but with a significantly retarded dilatation kinetics. In conclusion, we have designed and characterized a liposomal formulation that is qualified to entrap biologically active VIP and displays structural features to be considered for delivery of VIP to the lung.