The in-vivo cutaneous absorption of hydrocortisone was examined following topical application of hydrocortisone-containing liposomes. The formulation was applied onto the skin (1.0 cm(2)) of the hairless mouse (at a dose of 0.1 mg hydrocortisone) in the presence and absence of occlusion, and temporal profiles of the drug in the skin (stratum corneum and viable skin) were monitored. Under the non-occluded condition, the drug amount in the stratum corneum and viable skin reached its maximuim within 1 h, and then decreased rapidly. Celation of the liposomes by complete dehydration of the formulation under non-occlusion, which may prevent partition of the drug into the skin, appears to be a cause of the rapid decrease. Under the occluded condition, the drug amount in the skin was sustained although it then decreased dramatically compared with that under the non-occlusion (i.e. approximately 1/22 for stratum corneum and 1/8 for viable skin at 1 h, for example). A prevention of gelation of the liposomes by occlusion appears to be a potential mechanism of the maintenance of the drug concentration in the skin. The dramatic decrease in drug content in the skin may be attributed to the reduced partition of hydrocortisone, a hydrophobic drug, from the liposomes into the hydration-maintained stratum corneum under occlusion. In both application conditions, the concentration of hydrolcortisone in the hydrophilic viable skin layer was markedly lower than that in the stratum corneum, indicating that partitioning between these tissues is a primary determinant of hydrocortisone reaching viable skin tissue. The estimated penetration depth of the drug into the stratum corneum was not affected significantly by the application conditions. These results demonstrate that excessive dehydration (non-occlusion) is not desirable for the prolonged delivery of hydrocortisone from liposomes into the skin. They also indicate tht either hydration of the dosed skin (occlusion) is not preferable for the efficient delivery of hydrocortisone from the liposomes to the skin, especially to the viable skin. Therefore, both excessive dehydration of the liposomes and excessive hydration of the dosed skin (occlusion) should be avoided in the topical application of liposomal formulations for efficient delivery of hydrocortisone to the skin for a prolonged period of time.