Liposomal gadolinium diethylenetriaminepentaacetic acid (DTPA) encapsulated within 70- and 400-nm vesicles was tested as a contrast agent for magnetic resonance (MR) imaging of the liver in rats with hepatic metastases. Liposomal Gd-DTPA caused significant improvement in contrast between liver and tumor (P < .005) on T1-weighted MR images. Smaller 70-nm liposomal Gd-DTPA vesicles caused greater contrast enhancement, reflecting the larger surface-area-to-volume ratio of the smaller vesicles. Liposomal Gd-DTPA-enhanced images permitted significant improvement in metastasis detection by five blinded radiologists (P < .005). By comparison, free Gd-DTPA without liposomes caused a statistically significant reduction in contrast between tumor and liver and reduced lesion detection (P < .01). Liposomal Gd-DTPA also resulted in sustained vascular enhancement for 1 hour after administration. The results suggest that paramagnetic liposomes may become a useful MR imaging contrast agent.