Emulsification of mineral oil by phospholipids donated by liposomes composed of dimyristoyl phosphatidylcholine, dimyristoyl phosphatidylglycerol, cholesterol, and lipid A by extrusion resulted in the formation of oil-in-water liposomal emulsions containing a substantial number of intact liposomes. Increasing the proportion of liposomes from 25 mM to 150 mM phospholipid and increasing the oil content from 2.5% (v/v) to 42.5% (v/v) changed the flow characteristics of the emulsions from fluid liquid-like to viscous. Likewise, the degree of stability of the emulsions was liposomal phospholipid concentration-dependent, ranging from partial emulsification in the range 25-100 mM to complete stabilization in the range 125-150 mM. Despite some loss of liposome integrity, as evidenced by the release of liposomal trapped glucose, emulsification of liposomes containing encapsulated prostate-specific antigen (PSA) exhibited antigen-specific immunostimulation in mice. These results suggest that liposomes containing encapsulated antigen can serve as constituents for the formulation of oil-in-water vaccines.