Bacterial lipopolysaccharide (LPS) can elicit septic shock; however, there is growing evidence that most of its pathophysiological effects are mediated by the release of tumor necrosis factor (TNF) and other cytokines. In turn, LPS-induced TNF production is thought to implicate the activation of intracellular protein kinase C (PKC). In this study, we examined whether pH-sensitive liposomes containing staurosporine (STP), a potent inhibitor of PKC, when injected intravenously would suppress TNF production and reduce mortality in an endotoxin rat model. We found that pretreatment of rats with pH-sensitive STP-liposomes by intravenous administration 1.5 h prior to LPS injection decreased lethality from 80% to approximately 30%. Importantly, this improvement in outcome was associated with significant reductions in TNF serum levels; 1 h after LPS injection serum TNF was 73% lower than in a saline control group, and at 2 h TNF levels were 84% lower. STP-liposome pretreatment also ameliorated the severe reduction in body temperature, characteristic for a hypodynamic shock, that was observed in LPS-challenged rats, but had relatively little effect on the transient leukopenia. We conclude that STP-liposomes can suppress LPS-induced TNF production by the mononuclear phagocytic system, can reduce the symptoms of septic shock, and can increase survival.