The objective of this work was to study the reduction in the capsaicin toxicity by encapsulation in liposomes. Capsaicin was extracted from peppers and characterized with high performance liquid chromatography (HPLC). We determined the zeta potential, polydispersivity index (PdI) and vesicle size of liposomes. Wistar rats were submitted to intravesical instillation of liposomes (LIP), capsaicin (CAP) or liposomes with capsaicin (CAPLIP). After 24 hours, bladders were removed for histological analysis. Vesicle size ranged from 68 to 105 nm with PdI smaller than 0.2 and zeta potential around -30 mV. The vesicles maintained stability over the 14-day study. The histological analysis of the CAP group showed intense inflammation in almost all bladder layers, as well as ulcer formation. Conversely, the CAPLIP group showed a smooth inflammatory reaction and hyperemia. In conclusion, the liposomes effectively protected the bladder against the irritative action of capsaicin.