To evaluate the use of liposomes containing Gadolinium-DTPA (Gd-DTPA) as potential intravascular contrast agents, we synthesized and tested Gd-DTPA liposomes. A freeze-thaw extrusion process was used to synthesize neutral unilamellar vesicles. Using this technique, we prepared 0.4 micron vesicles with encapsulation efficiency as high as 39% for Gd-DTPA. In vitro dialysis showed that essentially 100% of the Gd-DTPA was retained with the liposomes after 72 hours of dialysis. MR imaging of in vitro samples showed concentration-dependent increase in signal intensity with Gd-DTPA liposomes. Imaging of rats after intravenous injection of Gd-DTPA liposomes showed sustained intravascular contrast enhancement of vascular structures and liver greater than free Gd-DTPA. There was no evidence of acute toxicity in rats during the imaging experiments or on follow-up of two months. Paramagnetic liposomes may be useful to enhance the vasculature, liver, and spleen.