Success of cancer treatment is often hampered by the emergence of multidrug resistance (MDR) mediated by P-glycoprotein (ABCB1/Pgp). Doxorubicin (DOX) is recognized by Pgp and therefore it can induce therapy resistance in breast cancer patients. In this study our aim was to evaluate the susceptibility of the pegylated liposomal formulation of doxorubicin (PLD/Doxil®/Caelyx®) to MDR. We show that cells selected to be resistant to DOX are cross-resistant to PLD and PLD is also ineffective in an allograft model of doxorubicin-resistant mouse B-cell leukemia. In contrast, PLD was far more efficient than DOX as reflected by a significant increase of both relapse-free and overall survival of Brca1−/−;p53−/− mammary tumor bearing mice. Increased survival could be explained by the delayed onset of drug resistance. Consistent with the higher Pgp levels needed to confer resistance, PLD administration was able to overcome doxorubicin insensitivity of the mouse mammary tumors. Our results indicate that the favorable pharmacokinetics achieved with PLD can effectively overcome Pgp-mediated resistance, suggesting that PLD therapy could be a promising strategy for the treatment of therapy-resistant breast cancer patients.