We have conducted a phase I/II trial to determine the maximum tolerated dose, early safety and efficacy of single-agent liposomal daunorubicin in relapsed or refractory acute myeloid leukaemia (AML). Successive cohorts of six patients received escalated doses of 75, 100, 125 or 150 mg/m2 of DaunoXome for three consecutive days. Responding patients received a further consolidation cycle of DaunoXome at a dose identical to the one inducing complete or partial remission at the various dose levels. Twenty-eight patients with a median age of 50.5 years were enrolled. A maximum tolerated dose was determined at 150 mg/m2. Twelve patients received the second cycle. DaunoXome was well tolerated at all administered levels; dose-limiting toxicities included nausea and vomiting, mucositis and two episodes of cardiotoxicity resulting in the death of two patients. The overall response rate was 46% with a median duration of response of 180 d and a median duration of survival of 208 d. Ten patients demonstrated a complete response following cycle 1, and a further four entered partial response with the first cycle (marrow blasts between 5% and 10%). Of these, three attained complete response with the second cycle (total complete response 13/28). Our results indicate that DaunoXome at a dose of 150 mg/m2 displays acceptable toxicity in a 3-d regimen followed by a 3-d consolidation course at 100 mg/m2/d. At this dose schedule, interestingly high remission rates were achieved, justifying further evaluation of DaunoXome for the treatment of relapsed or refractory AML patients.