This study focuses on the possible therapeutic utility of liposomes in the local treatment of inflammatory disorders, specifically rheumatoid arthritis (RA). Our purpose was to design a depot delivery system of an anti-inflammatory glycoprotein, lactoferrin (Lf), using positive multivesicular liposomes and to investigate its in vivo efficiency. Lactoferrin (Lf) has previously been shown to have therapeutic potential in mice with collagen-induced arthritis (CIA) after intra-articular (i.a.) injection. In order to protect Lf from enzymatic degradation and to maintain an adequate concentration in the joint, liposomes have been used as carriers for controlled drug delivery. Based on our previous findings we compared the ability of free Lf and Lf encapsulated in liposomes to suppress established joint inflammation and to modulate the cytokine response of lymph node (LN) T lymphocytes in DBA/1 mice with CIA. The anti-inflammatory effect of Lf formulated in positive liposomes was more pronounced compared with the free protein. After a single i.a. injection of liposomal Lf the arthritic score significantly decreased continuously for 2 weeks while in the case of free Lf for only 3-4 days. The cytokine levels produced by LN T cells showed decreased pro-inflammatory cytokines (TNF-alpha and IFN-gamma) accompanied by increased anti-inflammatory cytokines (IL-5 and especcialy IL-10) in encapsulated compared with free Lf. When compared with free Lf, liposomal Lf decreased the expression of costimulatory molecules on DCs, reduced pro-inflammatory (TNF) and increased anti-inflammatory (IL-10) cytokine production. Using CIA model we have studied the liposome trafficking following i.a. administration and we have identified DCs as a target for liposomes in the draining LN. Our results suggest that the entrapment of Lf in liposomes may modify its pharmacodynamic profile and could have great potential as controlled delivery system in the treatment of RA and other local inflammatory conditions.