Many applications envisioned for liposomes in cell biology and chemotherapy require their direction to specific cellular targets. The ability to use antibody as a means of conferring specificity to liposomes would markedly increase their usefulness. We report here a method for covalently coupling soluble proteins, including monoclonal antibody and Staphylococcus aureus protein A (ref. 4), to small sonicated liposomes, by using the heterobifunctional cross-linking reagent N-hydroxysuccinimidyl 3-(2-pyridyldithio)propionate (SPDP, Pharmacia). Liposomes bearing covalently coupled mouse monoclonal antibody against human beta 2-microglobulin [antibody B1.1G6 (IgG2a, kappa) (B. Malissen et al., in preparation)] bound specifically to human, but not to mouse cells. Liposomes bearing protein A became bound to human cells previously incubated with the B1.1G6 antibody, but not to cells incubated without antibody. The coupling method results in efficient binding of protein to the liposomes without aggregation and without denaturation of the coupled ligand; at least 60% of liposomes bound functional protein. Further, liposomes did not leak encapsulated carboxyfluorescein (CF) as a consequence of the reaction.