Liposomes (phospholipid artificial membrane vesicles) have been used in targeted drug delivery and recently in the development of oral vaccines using purified soluble antigens for the induction of mucosal immune responses. Although the mechanisms by which liposomes promote the induction of responses to soluble antigens have not been clearly shown, it has been suggested that these vesicles, when given orally, are taken up by M cells for delivery of antigen to underlying lymphoid cells of the Peyer's patch. This study investigated in vivo the uptake of liposomes by cells of Peyer's patch. Following exposure of surgically constricted segments of rat small intestine to small unilamellar liposomes or gold-labelled solid core liposomes, Peyer's patches were removed, fixed, and processed for examination by transmission electron microscopy. Sections of Peyer's patch from experimental animals showed M cells with endocytic vesicles containing liposomes. Vesicles containing liposomes were also observed between M cells and lymphoid cells. These results indicate that intact liposomes are endocytosed by M cells and provide evidence for a possible mechanism by which M cells deliver antigen to lymphoid cells in the Peyer's patch. These findings support the potential usefulness of liposomes in oral vaccine development.