Injectable local anesthetics that would last for many days could have a marked impact on periprocedural care and pain management. Formulations have often been limited in duration of action, or by systemic toxicity, local tissue toxicity from local anesthetics, and inflammation. To address those issues, we developed liposomal formulations of saxitoxin (STX), a compound with ultrapotent local anesthetic properties but little or no cytotoxicity. In vitro, the release of bupivacaine and STX from liposomes depended on the lipid composition and on whether dexamethasone was incorporated. In cell culture, bupivacaine, but not STX, was myotoxic (to C2C12 cells) and neurotoxic (to PC12 cells) in a concentration- and time-dependent manner. Liposomal formulations containing combinations of the above compounds produced sciatic nerve blockade lasting up to 7.5 days (with STX + dexamethasone liposomes) in male Sprague-Dawley rats. Systemic toxicity only occurred where high loadings of dexamethasone increased the release of liposomal STX. Mild myotoxicity was only seen in formulations containing bupivacaine. There was no nerve injury on Epon-embedded sections, and these liposomes did not up-regulate the expression of 4 genes associated with nerve injury in the dorsal root ganglia. These results suggest that controlled release of STX and similar compounds can provide very prolonged nerve blocks with minimal systemic and local toxicity.