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An in vitro translation system, based on cell components of the hyperthermophilic archaeon, Thermococcus kodakaraensis, has previously been developed. The system has been optimized and applied for protein production at high temperatures (60-65??C). In this paper, we have examined the possibilities to utilize this system at a lower temperature range using green fluorescence protein (GFP) as the reporter protein. By optimizing the composition of the reaction mixture, and adding chaperonins from the mesophilic Escherichia coli, the yield of protein production at 40??C was increased by fivefold. For liposome encapsulation of the optimized system, water-in-oil cell-sized emulsions were prepared by adding the translation system/GFP mRNA mixture to mineral oil supplemented with 1,2-dioleoyl-sn -glycero-3-phosphatidylcholine (DOPC). Giant liposomes were formed when these emulsions passed across a water/oil interface occupied with DOPC. The liposomes were incubated at 40??C for 90 min, and fluorescence was examined by laser confocal microscopy. A significant increase in average fluorescence intensity was observed in liposomes with GFP mRNA, but not in those without mRNA. Our results indicate that the T. kodakaraensis in vitro translation system is applicable for protein production within giant liposomes, and these artificial cell models should provide the methodology to reconstitute various cell functions from a constitutional biology approach.