We recently reported that hemoglobin (Hb) encapsulated in liposomes (LEH) containing phosphatidyl-inositol (PI) was efficacious in rats. However, liposomes containing PI may temporarily compromise mononuclear phagocytic system (MPS) function. The objective of this study was then to determine whether a polyethylene oxide derivative of phosphatidyl ethanolamine (PEG-PE) would serve as an acceptable substitute for PI in our LEH formulation. In this study we compare the physical properties, pharmacokinetics and efficacy in life support obtained for Hb encapsulated with either PI or PEG-PE phospholipids. Both liposome compositions contained the same matrix lipids, egg derived phosphatidyl choline (PC) and cholesterol, were of similar size and contained the same amount of encapsulated Hb. The liposomes differed only in their phospholipid component, one containing 5 mol% PI and the other an equal amount of the sterically-stabilizing lipid PEG-PE. The physical characteristics of the PI and PEG-PE compositions were remarkably similar: only small amounts of Met-Hb were generated during processing and following 1 month frozen storage, oxygen affinity and cooperativity and steady shear viscosity values for 30% by volume suspensions (in isotonic/isooncotic saline containing albumin) were near the normal values expected for whole blood, incubation in plasma at 37 degrees C resulted in only small amounts of Hb release and shear had very little impact on Hb leakage. Circulation half-lives following 50% isovolemic exchange-transfusion in rats were also similar, about 15-20 hours for either formation. Animals survived following 97% isovolemic exchange-transfusion of both compositions, confirming the efficacy of each.