Conjugates of three components, folic acid-poly(ethylene glycol)-distearoylphosphatidylethanolamine (FA-PEG-DSPE), derived from PEG with molecular masses of 2000 and 3350 Da were synthesized by a carbodiimide-mediated coupling of FA to H2N-PEG-DSPE. The conjugates were characterized by 1H NMR, MALDI-TOF, and HPLC analysis of enzymatic cleavage with carboxypeptidase G. As a prototype of a folate receptor (FR)-targeted system, the conjugates were formulated at 0.5 mol % phospholipid in hydrogenated phosphatidylcholine/cholesterol liposomes with or without additional methoxyPEG2000-DSPE. In vitro binding studies were performed with sublines of M109 (murine lung carcinoma) and KB (human epidermal carcinoma) cells each containing high and low densities of FR. FA-PEG-DSPE significantly enhanced liposome binding to tumor cells. The best binding was observed when FA-PEG liposomes contained no additional mPEG-lipid. In fact, our experiments showed that the presence of mPEG on liposomal surfaces significantly inhibited FA-PEG-liposome binding to FR. Increasing the molecular mass of the PEG tether from 2000 to 3350 Da improved the FR binding, particularly in the case of mPEG-coated liposomes. The FA-PEG liposomes bound to M109-HiFR cells very avidly as demonstrated by the inability of free FA (used in a 700-fold excess either at the beginning or at the end of the incubation) to prevent the cell binding. This is in contrast to the 5-10-fold lower cell binding activity of mPEG-FA compared to that of free FA, and likely to be related to the multivalent nature of the liposome-bound FA. Only 22% of FA-PEG3350 and 32% of FA-PEG3350/mPEG cell-associated liposomes could be removed by exposure to pH 3, conditions that dissociate FA-FR, suggesting that more than two-thirds of the bound liposomes were internalized during incubation for 24 h at 37 degrees C. FA-targeted liposomes also show enhanced nonspecific binding to extracellular tissue culture components, a phenomenon especially relevant in short incubation time experiments.