The aim of this study was to evaluate the effect of gallium nitrate, gallium-nitrilotriacetate (NTA) complex, and liposomal gallium-NTA on IL-6, TNF alpha, and nitric oxide (NO) release from activated macrophages. In addition, the expression of the inducible nitric oxide synthase (iNOS) was determined. Gallium inhibited dose-dependently the secretion of IL-6, TNF alpha, and NO from the LPS-induced macrophage-like RAW 264 cells. Encapsulation of gallium in negatively charged DSPG-liposomes increased its potency 10-50 times and 7-11 times compared to free gallium nitrate and gallium-NTA, respectively. Neither non-loaded liposomes nor NTA alone inhibited cytokine or NO secretion, demonstrating that the observed effects originated from gallium. Liposomal gallium-NTA inhibited the expression of iNOS by the macrophages, while other formulations of gallium had no effect. Thus, gallium, when delivered properly, suppresses macrophage functions by inhibiting the release of inflammatory mediators from the cells.