We have examined the size dependence of extravasation and interstitial localization of polyethyleneglycol-coated liposomes (PEG-liposomes) in the solid tumor tissue by means of electron microscopic observation. Liposomes composed of distearoyl phosphatidylcholine, cholesterol and distearoylphosphatidylethanolamine derivative of polyethyleneglycol (PEG) were prepared in various size ranges. PEG-liposomes with an average diameter of 100-200 nm showed the most prolonged circulation time and the greatest tumor accumulation in all the solid tumors employed in this experiment. Although large PEG-liposomes with a diameter of 400 nm showed a short circulation time in normal mice, the results in splenectomized mice indicated that they do have an intrinsic prolonged circulation character in vivo. However, large PEG-liposomes could not extravasate into solid tumor tissue. These results indicate that the size of liposomes is critical for extravasation. The electron microscopic observations revealed the almost exclusive engulfment of extravasated liposomes by tumor-associated macrophages; very few were taken up by tumor cells.