We administered liposome-encapsulated all-trans retinoic acid (L-ATRA) to 48 patients with refractory hematologic malignancies using an every-other-day schedule for 28 days and doses of 15 to 175 mg/m2. In 19 patients, pharmacology studies were conducted after the first (day 1) and seventh (day 15) doses. In contrast to the decline in tretinoin concentration seen within 3 to 4 days of administration of daily oral ATRA, there were no differences between the area under the curve (AUC) of tretinoin concentration versus time on day 1 and day 15 (P = .98, Wilcoxon signed-rank test). Peak day 1 concentrations after 15 mg/m2 were higher than those reported after 45 mg/m2 oral ATRA. Six patients with relapsed acute promyelocytic leukemia (APL) were treated. Three, each in first relapse and at least year from the last exposure to oral ATRA, achieved a complete response (CR). Disease recurred in two (one at 3 months despite maintenance L-ATRA and similarity in tretinoin AUC on days 1 and 85, and the other at 5 months, 2 months after discontinuation of L-ATRA) and the third was transplanted 1 month into CR. The three nonresponders were in at least a second relapse and failed to respond to oral ATRA before or immediately after receiving L-ATRA. Severe toxicity developed in three of eight patients treated at 175 mg/m2 (joint pains in two, skin in one). The maximum tolerated dose (MTD) was determined to be 140 mg/m2, at which dose grade 2 toxicity (primarily headache and skin) occurred in eight of eight patients, but grade 3 to 4 toxicity in none. Compared with oral ATRA, L-ATRA apparently results in greater exposure to tretinoin and for a longer time.