Encapsulation in polyethylene glycol-coated (pegylated; Stealth) liposomes alters the pharmacokinetic characteristics, and hence the safety and tolerability profile, of doxorubicin. Pegylated liposomal doxorubicin administered as a single agent is generally well tolerated. Grade III/IV leucopenia, stomatitis and palmar-plantar erythrodysaesthesia affected 16, 6 and 18% of solid tumour patients, respectively. Other adverse effects included nausea and vomiting and alopecia. Acute hypersensitivity infusion reactions have been reported in up to 9% of patients in some studies. Recently published data from a phase II trial in patients with refractory ovarian cancer showed no alopecia or cardiotoxicity and little nausea and vomiting after pegylated liposomal doxorubicin. Unlike free doxorubicin, pegylated liposomal doxorubicin is not a vesicant. Preliminary data, not yet confirmed in comparative studies, suggest that the pegylated liposomal formulation may be less cardiotoxic than free doxorubicin. Mucositis, however, appears to be increased. Studies to determine optimal dosing schedules and safety of pegylated liposomal doxorubicin in combination with other agents are ongoing.