Idiopathic pulmonary fibrosis is a devastating disease characterized by a progressive, irreversible, and ultimately lethal form of lung fibrosis. Except for lung transplantation, no effective treatment options currently exist. The bleomycin animal model is one of the best studied models of lung injury and fibrosis. A previous study using mouse tumor models observed that liposome-encapsulated bleomycin exhibited reduced lung toxicity. Therefore, we hypothesized that airway delivery of synthetic phosphatidylcholine-containing liposomes alone would protect mice from bleomycin-induced lung toxicity. C57BL/6 mice were administered uncharged multilamellar liposomes (100 μl) or PBS vehicle on day 0 by airway delivery. Bleomycin (3.33 U/kg) or saline vehicle was then given intratracheally on day 1 followed by four additional separate doses of liposomes on days 4, 8, 12, and 16. Fluorescent images of liposomes labeled with 1,1′-dioctadecyl-3,3,3′,3′ tetramethylindocarbocyanine perchlorate confirmed effective and widespread delivery of liposomes to the lower respiratory tract as well as uptake primarily by alveolar macrophages and to a lesser extent by type II alveolar epithelial cells. Results at day 22, 3 wk after bleomycin treatment, showed that airway delivery of liposomes before and after intratracheal administration of bleomycin significantly reduced bleomycin-induced lung toxicity as evidenced by less body weight loss, chronic lung inflammation, and fibrosis as well as improved lung compliance compared with controls. These data indicate that airway-delivered synthetic liposomes represent a novel treatment strategy to reduce the lung toxicity associated with bleomycin in a mouse model.