Liposomes have been prepared by the vesicle extrusion method (VETs) from mixtures of dipalmitoylphosphatidylcholine (DPPC), phosphatidylinositol (PI) and dipalmitoylphosphatidylethanolamine with covalently linked poly(ethylene glycol) molecular mass 5000 and 2000 (DPPE-PEG 5000 and DPPE-PEG 2000) covering a range of 0-7.5 mole%. The encapsulation of D-glucose has been studied and found to be markedly dependent on the mole% DPPE-PEG. The permeability of the liposomes to D-glucose has been measured both as a function of temperature and liposome composition. The permeability coefficients for D-glucose increase with mole% DPPE-PEG 5000 and with temperature over the range 25-50 degrees C. The activation energies for glucose permeability range from 90 to 23 kJ mol(-1). The decrease in activation energy with increasing temperature is attributed to an increasing number of bilayer defects as the liposome content of PEG-grafted lipid is increased. The dependence of D-glucose encapsulation as a function of PEG-grafted lipid content is discussed in terms of the conformation of the PEG molecules on the inner surface of the bilayer. For liposomes containing DPPE-PEG 5000 the relative percentage encapsulation of glucose, assuming that the PEG surface layer excludes glucose, is comparable to that predicted from the mushroom and brush conformational models.