A solution containing synthetic liposomes was injected into rabbit knee joints. This induced light and electron microscopic findings very similar to those seen in acute or chronic arthritis, not attributable to any mechanism other than to spherulites, in humans. Synovial fluid studies revealed leukocytosis and abundant extracellular, and/or intracellular positively birefringent spherulites, which appeared as Maltese crosses. Histologic studies of synovial membranes showed infiltration with polymorphonuclear neutrophils or mononuclear cells. Examination of the synovial fluids and synovial membranes by electron microscopy revealed intracellular multilayered membranous arrays of varying shapes. These observations suggest that further consideration should be given to a phlogistic role for similar spherulites found in some patients.