The results obtained in this study establish that liposome formulations incorporating a synthetic polyethylene glycol-derivatized phospholipid have a pronounced effect on liposome tissue distribution and can produce a large increase in the pharmacological efficacy of encapsulated antitumor drugs. This effect is substantially greater than that observed previously with conventional liposomes and is associated with a more than 5-fold prolongation of liposome circulation time in blood, a marked decrease in uptake by tissues such as liver and spleen, and a corresponding increased accumulation in implanted tumors. These and other properties described here have expanded considerably the prospects of liposomes as an effective carrier system for a variety of pharmacologically active macromolecules.