Complexes formed between cationic liposomes and nucleic acids represent a highly efficient vehicle for delivery of DNA and RNA molecules into a large variety of eukaryotic cells. By using fluorescence, gel electrophoresis, and metal-shadowing electron microscopy techniques, the factors that affect the, yet unclear, interactions between DNA and cationic liposomes as well as the structural features of the resulting complexes have been elucidated. A model is suggested according to which cationic liposomes bind initially to DNA molecules to form clusters of aggregated vesicles along the nucleic acids. At a critical liposome density, two processes occur, namely, DNA-induced membrane fusion, indicated by lipid mixing studies, and liposome-induced DNA collapse, pointed out by the marked cooperativity of the encapsulation processes, by their modulations by DNA-condensing agents, and also by their conspicuous independence upon DNA length. The DNA collapse leads to the formation of condensed structures which can be completely encapsulated within the fused lipid bilayers in a fast, highly cooperative process since their exposed surface is substantially smaller than that of extended DNA molecules. The formation of the transfecting DNA-liposome complexes in which the nucleic acids are fully encapsulated within a positively-charged lipid bilayer is proposed, consequently, to be dominated by mutual effects exerted by the DNA and the cationic liposomes, leading to interrelated lipid fusion and DNA collapse.