We report a non-randomized Phase II clinical trial to assess the efficacy and safety of liposomal daunorubicin (DaunoXome) in the treatment of AIDS related Kaposi's sarcoma. Eleven homosexual men with advanced Kaposi's sarcoma were entered in the trial. Changes in size, colour and associated oedema of selected 'target' lesions were measured. Clinical, biochemical and haematological toxicities were assessed. Ten subjects were evaluated. A partial response was achieved in four, of whom two subsequently relapsed. Stabilization of Kaposi's sarcoma occurred in the remaining six, maintained until the end of the trial period in four. The drug was generally well tolerated, with few mild symptoms of toxicity. The main problem encountered was haematological toxicity, with three subjects experiencing severe neutropenia (neutrophil count < 0.5 x 10(9)/l). There was no evidence of cardiotoxicity. In this small patient sample, liposomal daunorubicin was an effective and well tolerated agent in the treatment of Kaposi's sarcoma.