We have investigated the in vitro cytotoxicity of free doxorubicin (DOX) and liposome-entrapped DOX (L-DOX) against a human ovarian carcinoma cell line (OV-1063) using a colorimetric assay. DOX was encapsulated in the inner water phase of liposomes by an ammonium sulfate-generated proton gradient. Liposomes varied in phospholipid composition but were of a similar size. It was found that the cytotoxic activity of L-DOX is substantially decreased when liposomes containing phospholipids of high phase-transition temperature (Tm) are used. The type of negatively charged headgroup did not have any significant influence on the cytotoxicity observed. Experiments using resin beads that bind free and protein-bound DOX, but do not interact with L-DOX, indicated that the cytotoxic effect is mediated by the release of drug from the liposomes into the extracellular medium; no evidence was found for direct cellular uptake of liposome-encapsulated drug. The use of the ionophore nigericin to induce the release of DOX from high-Tm liposomes increased cytotoxicity to a level comparable to free DOX, suggesting that 'remote release' techniques may substantially improve the efficiency of liposome-mediated drug delivery and allow for the full exploitation of the favorable pharmacokinetic properties of specific high-Tm formulations.