We have developed a composite electrode tip based on a new concept whereby the electrode is combined with a polymeric collar containing dexamethasone sodium phosphate (DSP). The collar is positioned immediately adjacent to the electrode. Initial evaluation of this concept employed the Telectronics Laserpor electrode and a collar containing approximately 1.8 mg of DSP (LPD). Conventional Telectronics Laserpor (LP) electrodes were used as controls. Further evaluation was performed using a DSP (less than 0.5 mg) eluting collar and a new 4 mm2 mushroom shaped electrode with a high microsurface Pt/Ir coating (MD). Data for conventional Telectronics Laserdish (LD) electrodes were used for comparison. Unipolar ventricular leads were implanted transvenously in the right ventricular apex of sheep. Voltage thresholds, pacing (5 V, 0.5 ms) and sensing (50/100 mV RMS, 50 Hz) impedances were measured during the subchronic phase (less than 6 weeks) and in the case of LD and MD for 6 months. The steroid eluting electrodes were effective in eliminating (2 weeks vs. Impl., N.S.) the 2 week threshold peaking seen with the control leads (2 weeks vs. Impl., P less than 0.005). The small area MD electrode thresholds remained stable and low for up to 6 months (0.38 +/- 0.09 (10) c.f. 0.46 +/- 0.11(6); 14 and 180 days, respectively, N.S.). The composite electrode tips with steroid releasing collars thus show great potential for a substantial reduction in stimulation energy.