Liposomes (phospholipid-based vesicles) have been investigated since 1970 as a system for the delivery or targeting of drugs to specific sites in the body. Because of their structural versatility in terms of size, composition, surface charge, bilayer fluidity and ability to incorporate almost any drug regardless of solubility, or to carry on their surface cell-specific ligands, liposomes have the potential to be tailored in a variety of ways to ensure the production of formulations that are optimal for clinical use. This includes controlled retention of entrapped drugs in the presence of biological fluids, controlled vesicle residence in the blood circulation or other compartments in the body, and enhanced vesicle uptake by target cells. Accumulated in vivo evidence, particularly in areas such as cancer chemotherapy, antimicrobial therapy, vaccines, diagnostic imaging and the treatment of ophthalmic disorders has indicated clearly that some liposome-entrapped drugs and vaccines exhibit superior pharmacological properties to those observed with conventional formulations. Such work has encouraged the application of liposomes in the treatment of diseases in humans. A large number of trials in patients with cancer or infections suggest that certain liposomal drug formulations are likely to prove clinically useful.