Abstract Recombinant human interleukin-2 (rhIL-2) was incorporated in liposomes for potential therapeutic applications using a novel process. In this process, rhIL-2 caused the formation of large, unique multilamellar vesicles (MLVs) from small unilamellar vesicles (SUVs) of dimyristoylphosphatidylcholine (DMPC). Vesicle coalescence occurred most rapidly at 19°C, between the pre- and main phase transition temperatures of DMPC, and showed a dependence upon pH (pH <5.5), ionic strength (>50 mM) and the initial size of the unilamellar vesicles (≤25 nm). Intermediates (partially coalesced vesicles) within the forming multilamellar structures were identified by freeze-fracture electron microscopy and their presence was corroborated by differential scanning calorimetry. Several distinct steps were identified in the coalescence process. In the initial step, rhIL-2 rapidly bound to the DMPC SUVs. This was followed by a pH-dependent conformational change in the protein, as evidenced by an increase in tryptophan fluorescence intensity. The SUVs then aggregated in large clusters that eventually annealed to form closed MLVs. In this process over 90% of the rhIL-2 was bound to and incorporated within the multilamellar structures.