The nuclear enzyme topoisomerase I (topo I) has been recently recognized as the target for the anticancer drug camptothecin (CPT; NSC 94600) and its derivatives. This drug has been reported to display effective antitumor effects on a variety of human tumor models xenografted in nude mice. However clinical studies of sodium CPT have revealed that the open-ring form of the drug is a poor inhibitor of topo I and much less potent antitumor agent than CPT lactone. However, the insolubility of CPT lactone makes it difficult to devise a suitable formulation for further clinical testing. In view of these observations, we report here the successful incorporation of CPT into a liposome-based drug delivery system (LCPT) composed of DPPC:Sph:CHOL:PI (2.4:6.6:1.0:0.05 M ratio) that can be used as a suitable formulation for clinical testing of the drug. Higher incorporation efficiency was observed when the total phospholipids: drug ratio = 40 and the cholesterol content = 1%. Image analysis of the CPT-containing liposomes with freeze-fracture electron microscopy has indicated that CPT significantly increased the interlamellar space of the vesicles as a result of its intercalation between lipid bilayers. This has occurred with no major disruptive effects on the bilayer structure. Thein vitrodrug release study in human serum was characterized by an initial rapid loss of 50% of contents during 4 h, followed by a slow leakage of the remaining 50% of the total drug over a 20 h period. When tested for its antitumor activity on nude mice xenografted with human malignant melanoma and breast carcinoma, LCPT displayed effective antitumor activity with minimal host toxicity. For example, single i.m. injection of LCPT at 10 mg/kg has produced complete tumor regression to nude mice xenografted with CLO beast carcinoma. Likewise, similar results were obtained with the nude mice xenografted with human malignant BRO cells melanoma. These results appear to suggest that i.m. administration of liposome-incorporated CPT has considerable potential for the treatment of human neoplastic diseases, especially lymph node metastases.