We review here various pharmacological aspects of pegylated liposomal doxorubicin (PLD) which have important implications on the safety and efficacy profile of this important agent. Particularly, the formulation properties of PLD and its long circulation time and the relationship between the high microvascular permeability of tumors and the selective accumulation of PLD in tumors are addressed. Emphasis is given to the correlation of pharmacokinetic parameters with pharmacodynamic effects of PLD. The evidence for drug interference with PLD clearance and its clinical relevance are discussed. We propose a simplified plasma PLD testing protocol for monitoring PLD clearance, as a tool for the clinician to control the safety and therapeutic dose level of PLD at an individual patient level. The enriched clinical experience with PLD has further strengthened its added value with regard to both safety and efficacy in the management of a broad variety of malignancies.