We describe here the preclinical studies of a novel formulation of liposome-entrapped mitoxantrone (LEM). The liposome entrapment efficiency of mitoxantrone was 93.4 +/- 2.8%. In vitro cytotoxicity studies in HL60 cells comparing LEM with conventional mitoxantrone (MTO) showed IC50 values of 0.31 +/- 0.05 ng/ml and 0.48 +/- 0.06 ng/ml for LEM and MTO, respectively. In CD2F1 mice, LEM was significantly less toxic as compared with MTO. A single intravenous (i.v.) dose of 15 mg/kg MTO produced 100% mortality in CD2F1 mice by Day 10, whereas a single i.v. dose as high as 35 mg/kg LEM caused no mortality for at least up to Day 60 post-treatment. Multiple doses of MTO (i.v., 5.0 mg/kg, 1x daily, x5) caused 100% mortality by Day 10, whereas a similar dose regimen of LEM caused no mortality in CD2F1 mice. Clinical and histopathology evaluations indicated long-term normal tissue protection in mice treated with relatively high single dose (i.v., 35 mg/kg) or multiple doses of LEM (i.v., 5.0 mg/kg, 1x daily, x5). LEM also demonstrated favourable pharmacokinetic profiles. CD2F1 mice injected with 5 mg/kg i.v. dose of LEM showed plasma levels 51-fold higher than with an equivalent dose of MTO. The area under the plasma concentration-time curve was 200-fold greater with LEM as compared to MTO. The plasma half-lives were 0.96 hours and 0.11 hours for LEM and MTO, respectively. An altered tissue distribution was observed with LEM; cardiac tissue demonstrating at least 2.6-fold lower levels of mitoxantrone with LEM vs. MTO. LEM exhibited significant anti-tumor activity against murine ascitic L1210 leukemia in CD2F1 mice. Treatment with a single dose of 20.0 mg/kg LEM resulted in 100% long-term survivors. LEM 2.5 mg/kg (i.v., x4) had antitumor activity against a human hormone-independent prostate carcinoma (PC-3) grown in athymic mice, while a comparable dose of MTO was too toxic. A significant decrease in toxicity, altered pharmacokinetics, and enhanced efficacy of LEM suggest that LEM may provide a viable alternative to the clinical use of conventional mitoxantrone.