The effects of chitosan-coated vesicles on the paracellular permeability of Caco-2 and 16HBE14o-cell lines, and their toxicity towards the same cell lines, have been compared to equivalent concentration of chitosan in solution. Chitosan-coated phospholipid vesicles and the same concentration of chitosan in solution were found to reduce the transepithelial electrical resistance (TER) of monolayers of 16HBE14o- and Caco-2 cells to a comparable extent. Upon removal of the vesicle suspension and the chitosan solution, TER had completely recovered within 24 h for Caco-2 cells and to about 50% of its original value for the 16HBE14o-cells. The extent of enhancement of transport across 16HBE14o-cell monolayers of hydrophilic markers of varying molecular weight was found to be comparable in the presence of chitosan-coated phospholipid vesicles and the same concentration of chitosan and was dependent upon the molecular weight of the hydrophilic marker. Chitosan (either bound to vesicles or free in solution) did not display a significant toxicity towards the Caco-2 cell line whereas chitosan-coated phospholipid vesicles were less toxic towards the 16HBE14o-cell line than the equivalent chitosan concentration. These data suggest that chitosan-coated vesicles are good candidates for the delivery of drugs and other biomolecules across epithelial barriers. (C) 2008 Wiley-Liss, Inc. and the American Pharmacists Association.