Functional protein synthesis was observed in cell-sized lipid vesicles following encapsulation of a gene-expression system. Expression of rsGFP (red-shifted green fluorescent protein) within individual vesicles was observed by fluorescence microscopy. Interestingly, at the early stage of the reaction, the expression efficiency inside the vesicle was remarkably higher than that in the solution outside. The synthesized rsGFP in individual vesicles is safe from attack by proteinase K added to the external aqueous solution. Studies on cell-sized vesicles expressing protein should contribute to a fundamental understanding of certain aspects of living systems and will be useful for practical applications, such as the construction of microreactors.