Glucocorticoids can inhibit solid tumor growth possibly due to an inhibitory effect on angiogenesis. The antitumor effects of the free drugs have only been observed using treatment schedules based on high and frequent dosing for prolonged periods of time. As long-circulating liposomes accumulate at sites of malignancy, we investigated the tumor-inhibiting potential of liposome-encapsulated prednisolone phosphate. Liposomal prednisolone phosphate could inhibit tumor growth dose-dependently, with 80% to 90% tumor growth inhibition of subcutaneous B16.F10 melanoma and C26 colon carcinoma murine tumor models at 20 mg/kg by single or weekly doses. Prednisolone phosphate in the free form was completely ineffective at this low-frequency treatment schedule, even when administered at a dose of 50 mg/kg. In vitro studies did not show an inhibitory effect of prednisolone (phosphate) on tumor cell, nor on endothelial cell proliferation. Histologic evaluation revealed that liposomal prednisolone phosphate-treated tumors contained a center with areas of picnotic/necrotic cells, which were not apparent in untreated tumors or tumors treated with the free drug. In conclusion, the present study shows potent antitumor effects of liposomal formulations of glucocorticoids in a low dose and low-frequency schedule, offering promise for liposomal glucocorticoids as novel antitumor agents.