1. The effect of liposome phospholipid composition has been assumed to be relatively unimportant because of the presumed inert nature of phospholipids. 2. We have previously shown that cationic liposome formulations used for gene therapy inhibit, through their cationic component, the synthesis by activated macrophages of the pro-inflammatory mediators nitric oxide (NO) and tumour necrosis factor-alpha (TNF-alpha). 3. In this study, we have evaluated the ability of different cationic lipids to reduce footpad inflammation induced by carrageenan and by sheep red blood cell challenge. 4. Parenteral (i.p. or s.c) or local injection of the positively charged lipids dimethyldioctadecylammomium bromide (DDAB), dioleyoltrimethylammonium propane (DOTAP), dimyristoyltrimethylammonium propane (DMTAP) or dimethylaminoethanecarbamoyl cholesterol (DC-Chol) significantly reduced the inflammation observed in both models in a dose-dependent manner (maximum inhibition: 70-95%). 5. Cationic lipids associated with dioleyol- or dipalmitoyl-phosphatidylethanolamine retained their anti-inflammatory activity while cationic lipids associated with dipalmitoylphosphatidylcholine (DPPC) or dimyristoylphosphatidylglycerol (DMPG) showed no anti-inflammatory activity, indicating that the release of cationic lipids into the macrophage cytoplasm is a necessary step for anti-inflammatory activity. The anti-inflammatory activity of cationic lipids was abrogated by the addition of dipalmitoylphosphatidylethanolamine-poly(ethylene)glycol-2000 (DPPE-PEG2000) which blocks the interaction of cationic lipids with macrophages. 6. Because of the significant role of protein kinase C (PKC) in the inflammatory process we have determined whether the cationic lipids used in this study inhibit PKC activity. The cationic lipids significantly inhibited the activity of PKC but not the activity of a non-related protein kinase, PKA. The synthesis of interleukin-6 (IL-6), which is not dependent on PKC activity for its induction in macrophages, was not modified in vitro or in situ by cationic lipids. The synthesis of NO and TNF-alpha in macrophages, both of which are PKC-dependent, was downregulated by cationic lipids. 7. These results demonstrate that cationic lipids can be considered as novel anti-inflammatory agents. The downregulation of pro-inflammatory mediators through interaction of cationic lipids with the PKC pathway may explain this anti-inflammatory activity. Furthermore, since cationic lipids have intrinsic anti-inflammatory activity, cationic liposomes should be used with caution to deliver nucleic acids for gene therapy in vivo.