Abstract: In this paper, praziquantel, an anti-hydatidosis drug, was encapsulated with lipsome by REV (Reverse -phase -evaporation) method, the encapsulated percentage was 60%. The drug distribution dynamics in mice of both praziquantel (PZQ) and praziquantel liposome (PZQ-Lip) were determined using RP-HPLC method. The results indicated that the drug concentration of blood, liver and spleen in the PZQ-Lip group was higher than those in the PZQ group from 1/2 to 16 hours post ip. the t 1/2 of the former was considerably prolonged. The toxicity of PZQ -Lip tested by LD50 was decreased about one fourth as compared with PZQ (3372 vs. 2 454 mg/kg). There was a significant difference in the cyst inhibition rate between PZQ-Lip group (68. 7%) and PZQ group (14. 3%)(P0. 01) as shown by the results of secondary alveococcosis mice treated with either drug at 500 mg/kg· d × 12 d for four consecutive courses. Histological observation of the germinal layer after treatment showed that the damage of PZQ-Lip group was more severe than that of PZQ group. The ul-trastructural observation showed that both drugs had marked effects on the organelles of cells. The above experiments indicated that the efficacy of PZQ-Lip was more effective than PZQ for treatment of alveococcosis.