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Zoledronic acid (Zol) is a potent inhibitor of farnesyl-pyrophosphate synthase with broad clinical use in the treatment of osteoporosis, and bone metastases. We have previously shown that encapsulation of Zol in liposomes targeted to the folate receptor (FR) greatly enhances its in vitro cytotoxicity. To examine whether targeted liposomal delivery of Zol could be a useful therapeutic approach, we investigated here the in vivo pharmacology of i.v. administered liposomal Zol (L-Zol) in murine models.Zol was passively entrapped in the water phase of liposomes containing a small fraction of either dipalmitoyl-phosphatidylglycerol (DPPG) or a polyethylene-glycol (PEG)-conjugated phospholipid with or without insertion of a folate lipophilic conjugate. Radiolabeled formulations were used for pharmacokinetic (PK) and biodistribution studies. Toxicity was evaluated by clinical, hematological, biochemical, and histopathological parameters. Therapeutic studies comparing free Zol, nontargeted and folate targeted L-Zol were performed in FR-expressing human tumor models.Encapsulation of Zol in liposomes resulted in major PK changes including sustained high plasma levels and very slow clearance. DPPG-L-Zol was cleared faster than PEG-L-Zol. Grafting of folate lipophilic conjugates on liposomes further accelerated the clearance of Zol. L-Zol caused a major shift in drug tissue distribution when compared to free Zol, with a major increase (20 to 100-fold) in liver and spleen, a substantial increase (7 to 10-fold) in tumor, and a modest increase (2-fold) in bone. Liposomal formulations proved to be highly toxic, up to 50-fold more than free Zol. PEG-L-Zol was more toxic than DPPG-L-Zol. Toxicity was non-cumulative and appears to involve macrophage/monocyte activation and release of cytokines. Co-injection of L-Zol with a large dose of blank liposomes, or injection of a very low Zol-to-phospholipid ratio liposome formulation reduced toxicity by 2–4-fold suggesting that diluting macrophage exposure below a threshold Zol concentration is important to overcome toxicity. L-Zol failed to significantly enhance the therapeutic activity of Zol vis-à-vis free ZOL and doxorubicin. Folate-targeted L-Zol was marginally better than other treatment modalities in the KB tumor model but toxic deaths greatly affected the outcome.Liposome delivery of Zol causes a major change in tissue drug distribution and an increase in tumor Zol levels. However, the severe in vivo toxicity of L-Zol seriously limits its dose and its utility for in vivo tumor cell targeting. This strategy is under evaluation using liposomes carrying less toxic bisphosphonates.