Liposomal gene therapy vectors that penetrate cells by endocytosis must escape an endosomal compartment in order to enter the target cell's nucleus. Because such endosomal compartments are generally acidic in nature, pH-sensitive liposomes have been designed that are stable at extracellular pH ( approximately pH 7.4) but fusogenic at endosomal pH values ( approximately pH 5). We report here the use of a novel folate-targeted, pH-sensitive, anionic liposomal vector that mediates the efficient delivery of DNA into folate receptor-bearing cells and discharges the DNA into the cytoplasm. N-Citraconyl-dioleoylphosphatidylethanolamine (C-DOPE), a derivative of dioleylphosphatidylethanolamine (DOPE) that hydrolyzes rapidly at pH 5 to yield DOPE, was synthesized and incorporated with DOPE and folate-polyethyleneglycol-DOPE into liposomes. The resulting liposomes were stable at neutral pH but fusogenic at pH 5. Folate-labeled gene transfer vectors were prepared by compacting plasmid DNA with polylysine at a 1:0.75 (w/w) ratio and complexing the condensed cationic plasmid with the above anionic liposomes. Association of the polylysine-DNA with the liposomes was confirmed by sucrose gradient centrifugation, where migration of the folate-labeled vectors was midway between that of the free liposomes and condensed polylysine-DNA. Transfection of cultured cancer cells with the pH-sensitive liposomal vectors was found to be significantly more efficient than transfection with DOPE-cholesterol hemisuccinate-based vectors, the more commonly used pH-dependent, liposomal transfection formulation. Optimization studies revealed that inclusion of only 3% C-DOPE and 0.1% folate-derivatized DOPE yielded the highest transfection activity. Nearly quantitative competition with free folic acid as well as direct correlation of transfection efficiency with folate receptor density for several different cell lines further documented that vector uptake was mediated by folate receptor endocytosis. Taken together, these data argue that C-DOPE warrants further consideration as a pH sensitive component of lipid-based gene delivery formulations.