A thorough understanding of the pharmacodynamic relationships associated with toxicity and efficacy behavior of liposome-encapsulated anticancer agents such as doxorubicin and vincristine will rely on the ability to accurately separate and quantify the free and liposome-associated drug fractions in plasma after administration. We have investigated the use of ultrafiltration as a method of isolating free doxorubicin and vincristine from liposomal drug under equilibrium conditions and compared it to previously developed nonequilibrium procedures based on solid-phase extraction. Adsorption of drugs dissolved in saline to the ultrafiltration devices resulted in concentration-dependent ultrafiltrate drug recoveries ranging from 41 to 96%. However, concentration-independent quantitative recovery of vincristine in saline solutions could be obtained by passivating the ultrafiltration devices with PEG-8000 and device drug adsorption was ameliorated for both agents by plasma. The ultrafiltration method provided a more reliable separation of free and protein-bound drug, whereas solid-phase extraction yielded artificially high free drug concentrations due to process-induced protein-bound drug complex dissocation. Also, coelution of liposomes with the free drug fraction using solid-phase extraction was 64- to 418-fold higher than observed with ultrafiltration. Taken together, these properties indicated a significantly increased degree of accuracy in measuring the amount of free doxorubicin and vincristine in samples containing liposomal formulations employing ultrafiltration compared to solid-phase extraction. The importance of this improvement was highlighted by observations that determinations of free drug concentrations in the plasma of mice injected with liposomal doxorubicin and vincristine were 3- to 12-fold higher using solid-phase extraction compared to ultrafiltration. Finally, the ultrafiltration procedure is rapid, versatile, and can be used for a wide range of drug and liposome concentrations and free drug/liposomal drug ratios.