To explore the feasibility of alginate gel as a vehicle for liposomes, we investigated the effects of various factors associated with the loading of drug-containing liposomes into the gel beads. The loading process includes (1) mixing of liposomes and alginate solution, (2) calcium induced gelation of alginates, (3) the time-dependent contraction of a gel body squeezing out interior water, and (4) possible leakage or release of a drug entrapped in liposomes in a series of each of theses processes. These effects were examined in terms of the leakage of a marker 5(6)-carboxyfluorescein (CF) from liposomes of egg phosphatidylcholine (EPC) and EPC/cholesterol (EPC/Cho)and liposome (phosphorus) release from curing and fully-cured gel beads whose initial polymer concentrations were 4 and 2%. Major findings were : (1) Alginate induced the leakage of a water-soluble drug incorporated in the liposomes as a function of the polymer concentration and the mixing time. (2) Calcium ions also stimulated the leakage of the drug. EPC/Cho liposomes were several times more resistant to the leakage of CF than were EPC liposomes. (3) The liposomes were well loaded without any loss in the gel bead despite the squeezing outflow of water and the bead contraction during gel curing. (4) Such curing caused leakage of the drug from the EPC liposomes in the very early stage while no effect was observed in the EPC/Cho liposomes. (5) In the gel-eroding medium (pH 7.4 Tris-HCl, 37°C), the total drug release was controlled by the erosion rate of the bead body. Immediately after the bead erosion, EPC liposomes retained about 60% of the drug in the 2% bead and only about 20% in the 4% bead, whereas EPC/Cho liposomes retained more than 85% regardless of the initial alginate concentration. The results provide valuable information for the design and applicability of the gel-loaded liposome delivery system.