Precipitation of etoposide and adverse events associated with the co-solvents in intravenous solutions can be avoided by using liposomal etoposide (LE). The pharmacokinetics and distribution of the commercial formulation (ETPI) and LE were compared in rats. The pharmacokinetic profiles were biphasic and similar in the initial phase (C(max), Vd, and t(1/2alpha)). However, LE showed a 60% increase in AUC with a 35% decrease in clearance (p < 0.05). This decreased clearance resulted in a 70% increase in the MRT of etoposide. The uptake of etoposide from LE was higher in macrophage-phagocytic endowed tissues indicating that LE is superior to ETPI for targeted delivery of etoposide.