To date there has been a focus on the application of sterically stabilized liposomes, composed of saturated diacylphospholipid, polyethylene glycol (PEG) conjugated lipids (5-10 mole%) and cholesterol (CH) (>30 mole%), for the systemic delivery of drugs. However, we are now exploring the utility of liposome formulations composed of diacylphospholipid conjugated PEG mixtures prepared in the absence of added cholesterol, with the primary objective of developing formulations that retain encapsulated drug better than comparable formulations prepared with cholesterol. In this report the stability of cholesterol-free distearoylphosphatidylcholine (DSPC):distearoylphosphatidylethanolamine (DSPE)-PEG(2000) (95:5 mol/mol) liposomes was characterized in comparison to cholesterol-containing formulations DSPC:CH (55:45 mol/mol) and DSPC:CH:DSPE-PEG(2000) (50:45:5 mol/mol/mol), in vivo. Circulation longevity of these formulations was determined in consideration of variables that included varying phospholipid acyl chain length, PEG content and molecular weight. The application of cholesterol-free liposomes as carriers for the hydrophobic anthracycline antibiotic, idarubicin (IDA), was assessed. IDA was encapsulated using a transmembrane pH gradient driven process. To determine stability in vivo, pharmacokinetic studies were performed using 'empty' and drug-loaded [(3)H]cholesteryl hexadecyl ether radiolabeled liposomes administered intravenously to Balb/c mice. Inclusion of 5 mole% of DSPE-PEG(2000) or 45 mole% cholesterol to DSPC liposomes increased the mean plasma area under the curve (AUC(0-24h)) 19-fold and 10-fold, respectively. Cryo-transmission electron micrographs of IDA loaded liposomes indicated that the drug formed a precipitate within liposomes. The mean AUC(0-4h) for free IDA was 0.030 micromole h/ml as compared to 1.38 micromole h/ml determined for the DSPC:DSPE-PEG(2000) formulation, a 45-fold increase, demonstrating that IDA was retained better in cholesterol-free compared to cholesterol-containing liposomes.