The purpose of this study was to prepare stable biopolymer-coated liposome suspensions using an electrostatic deposition method. Liposome suspensions were produced by homogenizing 1% soy lecithin in acetate buffer (0.1 M, pH 3). Cationic chitosan (Mw approximately 200 kDa) solutions were mixed with anionic liposome suspensions (d approximately 100 and 200 nm), and the effect of phospholipid concentration, chitosan concentration, and liposome size on the properties of the particles formed was determined. The particle size and charge (zeta-potential) were measured using dynamic light scattering and particle electrophoresis. The particle charge changed from -38 mV in the absence of chitosan to +60 mV in the presence of chitosan, indicating complex formation between the anionic liposomes and cationic chitosan molecules. Below a minimum critical chitosan concentration (c(min)), large aggregates were formed that phase separated within minutes, whose origin was attributed to formation of coacervates. On the other hand, above a maximum critical chitosan concentration (c(max)), large flocs were formed that sedimented within hours, whose formation was attributed to depletion flocculation. Minimum and maximum critical chitosan concentrations depended on liposomal concentration and size. At c(min) < c < c(max'), chitosan-coated liposomes were formed that did not aggregate and were stable to sedimentation. Coated liposomes had better stability to aggregation than uncoated liposomes when stored at ambient temperatures for 45 d. This study indicates that chitosan can be used to form biopolymer-coated liposomes with enhanced stability over uncoated liposomes.