The effect of liposome entrapped allergen on primary, secondary and ongoing IgE response was studied in mice. It was observed that mice primed with liposome entrapped allergen maintained significantly lower levels of serum specific IgE as compared to that of controls primed with allergen. Although alum adsorbed allergen could induce IgE synthesis in mice primed with liposome entrapped allergen the increase in serum specific IgE levels was lower than the animals primed and challenged with alum adsorbed allergen. On the contrary when BALB/c mice were primed with alum adsorbed allergen to induce IgE synthesis subsequent challenge by liposome entrapped allergen could down regulate the serum specific IgE response. Serum specific IgG response did not show any significant difference between the two groups. There was an increase in T suppressor cell subpopulation as measured by immunofluoresence technique in mice injected liposome entrapped allergen as compared to that in controls. The results indicate that liposome entrapped allergens may prove to be safe and effective in immunotherapy by reducing the allergenic response of the allergen at the same time increasing the antigenicity.