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Idarubicin has been successfully encapsulated in cholesterol-free liposomes, however, little is known about how the rate of drug release from circulating liposomes influences therapeutic activity. The studies described herein assess the attributes of a liposome formulation required to significantly increase the plasma levels of idarubicin and further establish whether increases in the circulation longevity of the drug mediate improved antitumor activity. Pharmacokinetic assessments of 6 different 3[H]-labelled liposome formulations were compared to free idarubicin. The highest idarubicin plasma concentrations were observed with DSPC/DSPE-PEG2000 liposomes formulated with 2 mol% DSPE-PEG2000 and 150 mM (iso-osmotic) internal citrate concentration. It was shown that increased levels of PEG-lipid incorporation augmented IDA release and the optimal liposomal formulation needed to be prepared under iso-osmotic conditions. For efficacy studies in a murine leukemia model, groups of 12-14 mice were treated i.v. with saline or equivalent doses (1, 2, 3 mg/kg) of free or liposomal IDA. Liposomal treatment groups exhibited a higher % increase in life span (ILS) as compared to equivalent doses of free drug. Efficacy studies completed in two drug resistant models, P388/ADR and MDA435LCC6/MDR1, demonstrated that neither the free nor liposomal formulation of idarubicin was therapeutically active. Encapsulation of IDA in liposomes increased antitumor activity in an IDA sensitive model, however, the significant increase in plasma drug levels was not sufficient to overcome multidrug resistance.