A process for producing a small-sized, lipid-based cochleate is described. Cochleates are derived from liposomes which are suspended in an aqueous two-phase polymer solution, enabling the differential partitioning of polar molecule based-structure by phase separation. The liposome-containing two-phase polymer solution, treated with positively charged molecules such as Ca.sup.2+ or Zn.sup.2+, forms a cochleate precipitate of a particle size less than one micron. The process may be used to produce cochleates containing pharmaceutical agents or biologically relevant molecules. Small-sized cochleates may be administered orally or through the mucosa to obtain an effective method of treatment.