Liposomes that have been labeled externally with a DNA oligomer are used in a capillary-migration, sandwich-hybridization assay for specific DNA target sequences. The liposomes are used in a DNA detection scheme that produces visually observable results in 10 min. The preparation and covalent attachment of a thiol-activated 22-base oligomer to the external surface of dye-containing liposomes is described, and the specificity of the assay toward perfectly complementary target DNA is demonstrated. Several characteristics of DNA-tagged liposomes that allow the use of increased stringency during hybridization are evaluated. These include the effect of temperature, formamide, and salt concentration on both the sandwich-hybridization assay and the liposomes themselves. The effects of several components of a common hybridization solution are determined with regard to both assay performance and liposome stability. Using a solution of 0.02% sodium dodecyl sulfate in 3X standard saline citrate, a visual detection limit of 200 amol of target DNA was obtained.