Liposome-encapsulated hemoglobin (LEH) is being developed as an oxygen therapeutic. In this work, we evaluated a neutral formulation of PEGylated LEH for its circulation and distribution properties in rodent models of 25% hypovolernic exchange transfusion. About 25% of blood in rats and rabbits was exchanged with LEH that had been previously labeled with Tc-99m radionuclide. The distribution of Tc-99m-LEH was followed by gamma camera imaging and intermittent blood sampling during 48 h, and counting the tissue-associated radioactivity after necropsy at 48 It. On the basis of circulation kinetics, the half-life of Tc-99m-LEH in blood was 30 and 39.8 h in rats and rabbits, respectively. Apart from blood, major organs of accumulation of LEH after 48 h included liver (rats, 10.3% and rabbits, 5.4% of injected dose) and spleen (rats, 2.4% and rabbits, 0.8% of injected dose). The results demonstrate that LEH circulates for a prolonged time after administration and that the animals tolerate at least 25% of blood exchange without any distress. Subsequent to the enhanced uptake in the RES, the rats clear LEH from the circulation faster than the rabbits. (C) 2004 Elsevier B.V. All rights reserved.