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Human exposure to silica is of great occupational concern as it is marked by pulmonary inflammation and fibrosis. The present work was performed to investigate, characterize, and modulate the responses that occur as a result of silica exposure. The intratracheal instillation of silica to rats results in pulmonary fibrosis but the cellular processes involved in the development of the chronic disease have not been well characterized. The hypothesis of this study was that pharmacological intervention early in the silica-induced inflammatory cascade will attenuate fibrosis development. The acute phase response to silica appears by 2 hours after instillation as evidenced by significant increases in total protein in the bronchoalveolar lavage fluid. A fulminant response occurs at 4 hours with increases in albumin, {dollar}\\beta{dollar}-glucuronidase and lactate dehydrogenase, in addition to neutrophilic inflammation and enhanced oxidative tissue status. Initiation of the early responses may be attributed to macrophage activation; therefore, attempts were made to deplete these cells in hopes of eliminating both the acute and chronic silica responses. Depletion studies involving a cytotoxic macrophage antibody, gadolinium chloride, and dichloromethylene diphosphonate were unsuccessful in either producing or maintaining significant macrophage depletion in vivo. Although depletion attempts were unsuccessful, functional modulation of cellular activity was possible by the administration of the steroid dexamethasone. Systemic dexamethasone administration significantly reduced the degree of neutrophilic inflammation. Despite the cellular inhibition, systemic dexamethasone elicited no effect on biochemical parameters and the fibrotic endpoint. This lack of efficiency was probably a result of dosage limitations due to adverse drug effects and insignificant lung tissue drug delivery. The development of a liposomal drug delivery system allowed for local tissue delivery via intratracheal instillation, lower systemic drug levels, and "selective" delivery to the cells of interest. Dexamethasone-containing liposomes produced significant protection against cellular inflammation and fibrosis, but not against increased albumin, {dollar}\\beta{dollar}-glucuronidase, lactate dehydrogenase, and oxidant generation levels. Since dexamethasone is known to inhibit the production of pro-inflammatory/fibrogenic mediators and enhance anti-inflammatory/fibrogenic mediators produced by macrophage populations, the protection observed may be due to the effective pharmacological manipulation of normal macrophage function.