Opioids have been shown to relieve thermal hyperalgesia associated with neuropathic pain. We used a novel technique to produce liposome-encapsulated hydromorphone (LEH), which we then tested in a chronic constriction injury (CCI) thermal hyperalgesia model of neuropathic pain. Rats were divided into sham-operated and CCI groups. Treatments consisted of LEH or standard hydromorphone, administered at surgery or 3 d after surgery, when thermal hyperalgesia had developed in the CCI rats. We measured thermal withdrawal latencies on days 0, 3, and 5. CCI rats given liposome-encapsulated vehicle or standard hydromorphone at surgery developed full thermal hyperalgesia. CCI rats given LEH at surgery exhibited no significant change compared with baseline values in thermal withdrawal latency, indicating that this preparation prevented hyperalgesia after a single injection. CCI rats given LEH on day 3 (that is, after they had developed hyperalgesia) showed reversal of hyperalgesia that persisted to day 5, whereas CCI rats given standard hydromorphone on day 3 showed only brief (approximately 90 min) reversal of hyperalgesia. Preemptive injection of LEH prevented hyperalgesia in this model for as long as 5 d. In addition, hyperalgesia was alleviated for at least 2 d after injection of a single dose of LEH. These results suggest that liposome-encapsulation of hydromorphone offers a convenient and effective means to provide relief from neuropathic pain in this rodent model.