Initial clinical studies with doxorubicin entrapped in the bilayer of phosphatidylglycerol-rich liposomes were hindered by the avid reticuloendothelial system (RES) uptake and by drug leakage from circulating liposomes. In contrast, recent tests of a doxorubicin formulation of polyethyleneglycol-coated liposomes (Doxil) in cancer patients indicate that the drug pharmacokinetic properties are significantly altered, with a prolonged distribution half-life of approximately 2 days. Plasma fractionation studies show that nearly all the drug measured in plasma is in liposome-encapsulated form. The dose of Doxil has been escalated from 25 to 60 mg/m2. Stomatitis is the most significant toxicity, and skin toxicity, in the form of hand-foot syndrome, may complicate the repeated administration of Doxil. A number of objective antitumor responses in a variety of malignancies have been observed, indicating that Doxil is an active antitumor compound. Polyethyleneglycol-coated liposomes show a distinct advantage over previous liposome formulations directed at the RES and appear to be a promising drug delivery system for doxorubicin.