The tumor necrosis factor (TNF) mutant TNF-SAM2 has previously been shown to have a therapeutic profile superior to parental TNF. To initially evaluate the characteristics of liposomal formulations of TNF-SAM2, it was modified with the N-hydroxysuccinimide ester of caprylic acid to increase its hydrophobic binding to multilamellar and small unilamellar vesicles (MLVs and SUVs). Native PAGE and fluorescamine analysis of acetylated parental TNF and TNF-SAM2 indicated that these proteins both displayed trimeric structures based on crosslinking/SDS-PAGE analysis and behaved similarly with respect to reactivity of their amino functions. Limited N-terminal sequencing analysis of partially acetylated (approx 3 acetyl groups per trimer) TNF-SAM2 indicated that the N-terminal Val was not modified; this was also concluded based on HPLC/mass spectrometric (LC-MS) analysis of Glu C digests. LC-MS analysis of tryptic digests of the acetylated TNF-SAM2 indicated that Lys-98 was unreactive. Molecular ions corresponding to acetylated Lys-containing peptides for all five other Lys residues could be detected; none appeared hyperreactive, but Lys-11 appeared hyporeactive. MLVs composed of DMPC/DMPG (7:3) and SUVs composed of DPPC/DSPC (1:1) displayed high capacity for binding to caprylated TNF-SAM2. These formulations of caprylated TNF-SAM2 displayed tumor necrotizing and growth-inhibitory activity in a syngeneic tumor model, and may be candidates for clinical development.