Poly(ethylacrylic acid) (PEAA) is a pH-sensitive polymer that undergoes a transition from a hydrophilic to a hydrophobic form as the pH is lowered from neutral to acidic values. In this work we show that pH sensitive liposomes capable of intracellular delivery can be constructed by inserting a lipid derivative of PEAA into preformed large unilamellar vesicles (LUV) using a simple one step incubation procedure. The lipid derivatives of PEAA were synthesized by reacting a small proportion (3%) of the carboxylic groups of PEAA with C10 alkylamines to produce C10-PEAA. Incubation of C10-PEAA with preformed LUV resulted in the association of up to 8% by weight of derivatized polymer with the LUV without inducing aggregation. The resulting C10-PEAA-LUV exhibited pH-dependent fusion and leakage of LUV contents on reduction of the external pH below pH 6.0 as demonstrated by lipid mixing and release of calcein encapsulated in the LUV. In addition, C10-PEAA-LUV exhibited pH dependent intracellular delivery properties following uptake into COS-7 cells with appreciable delivery to the cell cytoplasm as evidenced by the appearance of diffuse intracellular calcein fluorescence. It is demonstrated that the cytoplasmic delivery of calcein by C10-PEAA-LUV could be inhibited by agents (bafilomycin or chloroquine) that inhibit acidification of endosomal compartments, indicating that this intracellular delivery resulted from the pH-dependent destabilization of LUV and endosomal membranes by the PEAA component of the C10-PEAA-LUV. It is concluded that C10-PEAA-LUV represents a promising intracellular delivery system for in vitro and in vivo applications.