The purpose of the present study was to examine whether exogenous liposomal cDNA gene transfer is recognized by the cell and causes endogenous cellular and physiological responses. When administered as a protein, IGF-I is known to cause adverse side effects due to lack of cellular responses. Therefore, we used IGF-I cDNA as a vector to study cellular and physiological effects after liposomal administration to wounded skin. Sprague-Dawley rats were given a scald burn to inflict an acute wound and were divided into two groups to receive weekly subcutaneous injections of liposomes plus the Lac-Z gene (0.2 μg vehicle) or liposomes plus the IGF-I cDNA (2.2 μg) and Lac Z gene (0.22 μg). Transfection was confirmed by histochemical assays for β-galactosidase. Planimetry, immunological assays, and histological and immunohistochemical techniques were used to determine molecular mechanisms after gene transfer, protein expression, and dermal and epidermal regeneration. IGF-I cDNA transfer increased IGF-I protein expression and caused concomitant cellular responses by increasing IGF binding protein (IGFBP)-3 and decreasing IGFBP-1. IGF-I cDNA gene transfer increased keratinocyte growth factor expression and exerted promitogenic antiapoptotic effects on basal keratinocytes, thus improving epidermal regeneration. IGF-I cDNA improved dermal regeneration by an increased collagen deposition and morphology. IGF-I cDNA increased VEGF concentrations and thus neovascularization. Exogenous-administered IGF-I cDNA is recognized by the cell and leads to similar intracellular responses as the endogenous gene. Liposomal IGF-I gene transfer further leads to improved dermal and epidermal regeneration by interacting with other growth factors.