The hypocalcemic effect of liposomal-entrapped calcitonin (CT) was evaluated in rats. Salmon CT and human CT were entrapped in liposomes composed of egg phosphatidylcholine with or without an equimolar amount of cholesterol. The liposomes were separated by Sepharose 4B chromatography into fractions consisting of large multilamellar vesicles and small unilamellar vesicles. The incorporation of CT was monitored by counting [125I]CT and by specific RIA. Liposomal entrapment enhanced the hypocalcemic potency of parenterally administered salmon CT and human CT. After iv administration, the large multilamellar vesicles were more potent than small unilamellar vesicles in their hypocalcemic effect; cholesterol inclusion in the MLV liposome preparation prolonged the hypocalcemia. However, with im administration, the cholesterol-free liposomes were more potent than their cholesterol-containing counterparts regardless of size. These studies demonstrate that liposomal entrapment can be used to enhance the hypocalcemic potency of CT. It appears that both the size and composition of the liposome preparation are important in this effect, as is the route of administration. It may be possible to produce liposome-CT preparations with advantageous pharmacological characteristics.