Rheumatoid arthritis is, at least in part, associated with immune-complex induced synovitis. Immune complexes and complement components (e.g. C5a, C3a, and C3b) cause the non-cytotoxic release of lysosomal proteases from both polymorphonuclear leukocytes and macrophages. To modify immune tissue injury of joint structures, we will introduce into the offending inflammatory cells protease inhibitors specific for the proteases of phagocytes, by means of liposomes. These vectors will be introjected into PMN's and macrophages in two ways: a) by coating with aggregated immunoglobulins so as to promote uptake via Fc receptors into the lysosomal apparatus, and b) by preincorporating the fusogen, lysolecithin into the liposomal bilayer so as to engender fusion of multilamellar liposomes directly with the plasma membrane of macrophages, which contain non-lysosomal proteases. After establishing that phagocytes after in vitro exposure to immune reactants, release proteases (collagenase, elastase, cathepsins G and D) capable of degrading cartilage slices, isolated proteoglycans, and of affecting normal synovial cells in culture, we will determine which specific protease inhibitors prevent phagocyte-induced connective tissue injury. The appropriate inhibitors (alpha 1-antitrypsin, pepstatin, phosphoramidon, elastatinol) will then be incorporated into liposomes. Liposome-encapsulated inhibitors will also be instilled into the knee joints of rabbits in which immune complex arthritis has been induced by means of BSA/anti-BSA and peroxidase complexes, to determine whether immune injury of joints can also be aborted in vivo. By means of ultrastructural cytochemistry, we will determine the fate of both antigen and antibody in the models of arthritis, as well as the cellular localization of inhibitor-laden liposomes used to modify immune joint injury. These studies should not only clarify the role of lysosomal and non-lysosomal proteases in immunologically induced arthritis, but define the discrete contributions of PMN and macrophage proteases to connective tissue degradation induced by immune complexes and complement components.