The effects of daily intranasal instillation of liposomal dexamethasone and free dexamethasone phosphate were compared in a murine model of hypersensitivity pneumonitis induced by Saccharopolyspora rectivirgula (formally known as Micropolyspora faeni). After 3 weeks of antigen and liposome instillations, lung response was evaluated by bronchoalveolar lavage cell counts, lung index and histopathology. Systemic absorption was evaluated by measuring plasma adrenocorticotropic hormone (ACTH) level. Free dexamethasone phosphate induced a dose-dependent response with the maximal effect reached at 1 mg kg-1. At 0.1 mg kg-1, liposomal dexamethasone had a greater effect than free dexamethasone phosphate on bronchoalveolar cells ml-1: 3.01 x 10(5) +/- 0.35 x 10(5) compared to 4.70 x 10(5) +/- 0.34 x 10(5), and lung index: 1.22 +/- 0.10 compared to 1.86 +/- 0.07. Effect on histopathology was similar. Plasma ACTH levels (pg ml-1) were: 75.1 +/- 14.0 for animals receiving antigen and free dexamethasone phosphate (0.2 mg kg-1), and 149.7 +/- 12.0 for animals receiving antigen and liposomal dexamethasone (0.2 mg kg-1). In conclusion, liposome-incorporated dexamethasone is efficient in the treatment of experimental hypersensitivity pneumonitis and, contrarily to free dexamethasone phosphate, does not inhibit ACTH secretion.