A unique method for formulation of plasmid DNA with phospholipids has been devised for the purpose of producing vehicles that can mediate gene delivery and transfection of living cells. The polycation, spermine, was used to condense plasmid DNA within a water-in-chloroform emulsion stabilized by phospholipids. After organic solvent removal, the particles formed could be extruded to a number average size of about 200 nm and retained DNA that was protected from nuclease digestion. This resulted in a relatively high protected DNA-to-lipid ratio of approximately 1 g DNA/ mol lipid. The size distribution of the preparation was relatively homogeneous as judged by light microscopy and quasi-elastic light scattering. Electron microscopic studies showed structural heterogeneity, but suggested that at least some of the plasmid DNA in this preparation was in the form of the previously observed spermine-condensed bent rods and toroids and was encapsulated within liposomal membranes.