Gemcitabine (GEM) is presently the standard option for the treatment of advanced pancreatic cancer (PC). We investigated the in vitro and in vivo antitumor potential of GEM-loaded PEGylated liposomes (L-GEM) as a novel agent for the treatment of PC. In vitro analysis of antitumor activity against human PC cell lines, BXPC-3 and PSN-1, showed a significant time- and dose-dependent reduction of cell viability following exposure to L-GEM as compared to free GEM [at 72 h, IC(50): 0.009 vs. 0.027 microM (P = 0.003) for BXPC-3 and 0.003 vs. 0.009 microM (P < 0.001) for PSN1, respectively]. Confocal laser scanning microscopy demonstrated an effective liposome/cell interaction and internalization process following 3-h cell exposure to L-GEM. The in vivo antitumor activity of L-GEM was investigated in a cohort of SCID mice bearing BxPC-3 or PSN-1 xenografts. Animals were i.p. treated with L-GEM (5 mg/kg), or a threefold increased dose of free GEM (15 mg/kg), or empty liposomes or vehicle, twice a week for 35 days. A significant higher inhibition of tumor growth in mice treated with L-GEM versus free GEM (P = 0.006 and P = 0.004 for BXPC-3 and PSN-1, respectively) or control groups (P = 0.0001), translated in a survival advantage of L-GEM treated animals versus other groups. Pharmacokinetic studies showed enhancement of systemic bioavailability of L-GEM (t (1/2) = 8 h) versus to GEM (t (1/2) = 1.5 h). Our findings demonstrate that L-GEM is an effective agent against PC and exerts higher antitumor activity as compared to free GEM with no appreciable increase in toxicity. These results provide the pre-clinical rational for L-GEM clinical development for the treatment of PC patients.