Immunostimulatory oligodeoxynucleotides (ODN) containing cytosine-guanine (CpG) motifs are powerful stimulators of innate as well as adaptive immune responses, exerting their activity through triggering of the Toll-like receptor 9. We have previously shown that encapsulation in liposomal nanoparticles (LN) enhances the immunostimulatory activity of CpG ODN (LN-CpG ODN) (Mui et al. in J Pharmacol Exp Ther 298:1185, 2001). In this work we investigate the effect of encapsulation on the immunopotency of subcutaneously (s.c.) administered CpG ODN with regard to activation of innate immune cells as well as its ability to act as a vaccine adjuvant with tumor-associated antigens (TAAs) to induce antigen (Ag)-specific, adaptive responses and anti-tumor activity in murine models. It is shown that encapsulation specifically targets CpG ODN for uptake by immune cells. This may provide the basis, at least in part, for the significantly enhanced immunostimulatory activity of LN-CpG ODN, inducing potent innate (as judged by immune cell activation and plasma cytokine/chemokine levels) and adaptive, Ag-specific (as judged by MHC tetramer positive T lymphocytes, IFN-gamma secretion and cytotoxicity) immune responses. Finally, in efficacy studies, it is shown that liposomal encapsulation enhances the ability of CpG ODN to adjuvanate adaptive immune responses against co-administered TAAs after s.c. immunization, inducing effective anti-tumor activity against both model and syngeneic tumor Ags in murine tumor models of thymoma and melanoma.