Gemcitabine is a known anticancer agent rapidly deaminated to the inactive metabolite 2',2'-difluorodeoxyuridine; it must therefore be administered at very high dose. Many different approaches have been tried to improve the metabolic stability; we synthesized a series of increasingly lipophilic prodrugs of gemcitabine by linking the 4-amino group with valeroyl, heptanoyl, lauroyl and stearoyl linear acyl derivatives. We studied their stability at storage, in plasma and with the lysosomal intracellular enzyme cathepsins. We studied incorporation of these lipophilic prodrugs in liposomes, where their encapsulation efficiency (EE) closely depends on the length of the saturated 4-(N)-acyl chain, the phospholipids chosen and the presence of cholesterol. A maximum EE of 98% was determined for 4-(N)-stearoyl-gemcitabine incorporated in DSPC/DSPG 9:1. This formulation was correlated with the highest stability in vitro and in vivo. Cytotoxicity of gemcitabine prodrugs, free or encapsulated in liposomes, was between two- and sevenfold that of free gemcitabine. Encapsulation of long-chain lipophilic prodrugs of gemcitabine in liposomes protected the drug from degradation in plasma, assuring a long plasma half-time and intracellular release of the free drug.