Hypocrellin B (HB), a lipid-soluble natural pigment of perylenequinone derivative, is considered as potential photosensitizer for photodynamic therapy. Liposomes loaded with HB can constitute a simple model system, appropriate for better understanding the photodynamic action of HB in vivo. The steady-state absorption and emission spectra, quantum yield and lifetime of fluorescence of HB incorporated into egg l-a-phosphatidyl-choline (EPC) liposome were examined. The photochemical properties (Type I and/or Type II) of HB have also been studied in aqueous dispersions of small unilamellar liposomes of EPC using electron paramagnetic resonance and spectrophotometric methods, respectively. The quantum yield of ¹O₂ generated by HB is ca 0.76 in chloroform solution and it did not change upon the incorporation of HB into liposomes of EPC. The superoxide anion radical was generated by the electron transfer from the anion radical of HB (HB^·−) to oxygen. The disproportionation of O₂^·− can generate H₂O₂ and ultimately the highly reactive ^·OH via the Fenton reaction. It could be that the disproportionation proceeded too fast, so we could not detect O₂^·− directly in aqueous dispersions of liposome EPC. Moreover, the self-sensitized photooxygenation of HB embedded in liposomes was studied, and almost fully (87%) inhibiting this reaction of HB by p-benzoquinone (as the quencher of O₂^·−) in aqueous dispersion of liposome EPC indicated that the radical mechanism (Type I) might be mainly involved in this oxygenation. All these findings suggested that the photodynamic action of HB proceeded via both Type-I and -II mechanisms, but Type-I mechanism might play a more important role in the aqueous dispersion.