Glucocorticoids (GC) are frequently used for therapy of various inflammatory lung diseases by either systemic or inhalative application. Because the oral application often has various side effects and because the inhalative application is not as potent, new formulations of GCs are required. We evaluated the effect of a liposomal (Lip) formulation of methylprednisolone (MP) on the expression of lipopolysaccharide (LPS)-induced proinflammatory tumor necrosis factor (TNF) and antiinflammatory interleukin-10 (IL-10) in human alveolar macrophages (AM). AM were obtained from bronchoalveolar lavage fluids of patients with various inflammatory lung diseases and precultured 20 h+/-MP, either liposomal or free, and then stimulated with LPS. Cells were harvested for analysis of mRNA levels by real-time reverse transcriptase polymerase chain reaction (RT-PCR); supernatants were used to measure protein concentrations by ELISA. We confirm the suppression of LPS-induced TNF production by an average of factor 7 at the mRNA level and factor 3 at the protein level. On the other hand, we detected a strong increase of the IL-10 production by MP. At the mRNA level, liposomal MP alone led to an 18-fold increase, and the LPS-induced IL-10 mRNA was enhanced by factor 2. At the protein level, MP alone had no effect, but LPS-induced IL-10 was increased by factor 2.5. Our data show that liposomal MP can consistently induce IL-10 and reduce TNF when macrophages are exposed for a prolonged period of time. In all respects, liposomal MP had similar activities as free MP, but liposomes were selectively taken up by monocytes and macrophages and not by lymphocytes in blood and in the lung. This suggests that liposomal glucocorticoids when applied locally in the lung may act efficiently but with less side effects.