A preclinical toxicology study of intravenously administered liposome encapsulated doxorubicin (TLC D-99), free doxorubicin and empty liposomes was carried out in mice and dogs by single and multiple (daily for 5 days) dose schedules. Single dose intravenous injection studies in mice showed the encapsulated form of doxorubicin to be less toxic (LD50 of 32 mg/kg) than free doxorubicin (LD50 of 17 mg/kg). Toxicity in dogs was evaluated by serial serum chemistry, hematology and EKG analysis, urinalysis, clinical observations, necropsy and histopathologic examination. Empty liposomes injected intravenously into dogs were without significant toxicity. The maximally tolerated dose of free doxorubicin in beagles was 1.5 mg/kg; deaths were seen after a 50% escalation to 2.25 mg/kg. The maximally tolerated dose of liposome encapsulated doxorubicin was higher (2.25 mg/kg); deaths were seen after a 50% escalation to 3.37 mg/kg. A toxicity unique to the encapsulated agent was pyexia (as high as 105.6 degrees F) within twenty four hr of single dosage. This was seen in approximately half of the test animals, was not dose-related, and was not observed in animals that received empty liposomes. The organ specific toxicities seen with TLC D-99 were qualitatively similar to those of free doxorubicin, but less severe.