Abstract: The liposome encapsulating cysteamine and resveratrol in separate compartments is a liposome having a lipid or lipid bilayer shell and a hydrophilic core. The hydrophilic core contains a hydrophilic antioxidant, which in some embodiments, is cysteamine or pharmaceutically acceptable salts thereof, such as hydrochlorides or bitartrates. The region surrounding the hydrophilic core contains lipids or phospholipids and at least one lipophilic antioxidant, such as resveratrol. The lipophilic contents of the liposome surrounding the hydrophilic core tend to partition from the hydrophilic core and associate with the lipid or lipid bilayer shell. In some embodiments, the liposome composition may be used for the treatment of acute lung injury or acute respiratory distress syndrome, the antioxidants helping to reduce or alleviate inflammation, whether resulting from disease or trauma.