Using the biotin-streptavidin interaction as a model, we investigated the suitability of lanthanide chelates as encapsulated liposomal labels in liposome-based binding assays. Large unilamellar phospholipid:cholesterol liposomes containing europium-DTPA chelate and biotinylated phosphatidylethanolamine were prepared by detergent dialysis. The resulting Eu-liposomes (⊘120 nm) bound specifically to streptavidin in microtiter wells as measured by time-resolved fluorometric assay (TRF). The intensity of fluorescence released from the bound liposomes was dependent on the concentration of biotin in the liposome membrane, the concentration of europium entrapped in the liposomes, the incubation time and the amount of liposomes used in the assay. The sensitivity of the TRF assay allowed the detection of binding of attomole quantities of liposomes. The streptavidin-immobilised liposomes subjected to porcine pancreatic phospholipase A2 (EC 188.8.131.52) and detergents displayed a dose-dependent release of the encapsulated europium. Lanthanide-chelate-liposomes should prove useful for studies addressing binding and stability of liposomes.