A novel technique called the "lipid-coated ice droplet hydration method" is presented for the preparation of giant vesicles with a controlled size between 4 and 20 microm and entrapment yields for water-soluble molecules of up to about 30%. The method consists of three main steps. In the first step, a monodisperse water-in-oil emulsion with a predetermined average droplet diameter between 4 and 20 microm is prepared by microchannel emulsification, using sorbitan monooleate (Span 80) and stearylamine as emulsifiers and hexane as oil. In the second step, the water droplets of the emulsion are frozen and separated from the supernatant hexane solution by precipitation, followed by a removal of the supernatant and followed by the replacement of Span 80 by using a hexane solution containing egg yolk phosphatidylcholine, cholesterol, and stearylamine (5:5:1, molar ratio). This procedure is performed at -10 degrees C to keep the water droplets of the emulsion in a frozen state and thereby to avoid extensive water droplet coalescence. In the third step, hexane is evaporated at -4 to -7 degrees C and an external water phase is added to the remaining mixture of lipids and water droplets to form giant vesicles that have an average size in the range of that of the initial emulsion droplets (4-20 microm). The entrapment yield and the lamellarity of the vesicles obtained depend on the lipid/water droplet ratio and on the composition of the external water phase. At high lipid/water droplet ratio, the giant vesicles have a thicker membrane (indicating multilamellarity) and a higher entrapment yield than in the case of a low lipid/water droplet ratio. The highest entrapment yield ( approximately 35%) is obtained if the added external water phase contains preformed unilamellar egg phosphatidylcholine vesicles with an average diameter of 50 nm. The addition of these small vesicles minimizes the water droplet coalescence during the third step of the vesicle preparation, thereby decreasing the extent of release of water-soluble molecules originally present in the water droplets. The GVs prepared can be extruded through polycarbonate membranes to yield large unilamellar vesicles with about 100 nm diameter. This size reduction, however, leads to a decrease in the entrapment yield to about 12% due to solute leakage from the vesicles during the extrusion process.