Imaging methods capable of indicating the potential for success of an individualized treatment course, during or immediately following the treatment, could improve therapeutic outcomes. Temperature Sensitive Liposomes (TSLs) provide an effective way to deliver chemotherapeutics to a localized tumoral area heated to mild-hyperthermia (HT). The high drug levels reached in the tumor vasculature lead to increased tumor regression via the cascade of events during and immediately following treatment. For a TSL carrying doxorubicin (DOX) these include the rapid and intense exposure of endothelial cells to high drug concentrations, hemorrhage, blood coagulation and vascular shutdown. In this study, ultrasound-guided photoacoustic imaging was used to probe the changes to tumors following treatment with the TSL, HaT-DOX (Heat activated cytoToxic). Levels of oxygen saturation (sO2) were studied in a longitudinal manner, from 30 min pre-treatment to 7 days post-treatment. The efficacious treatments of HT-HaT-DOX were shown to induce a significant drop in sO2 (>10%) as early as 30 min post-treatment that led to tumor regression (in 90% of cases); HT-Saline and non-efficacious HT-HaT-DOX (10% of cases) treatments did not show any significant change in sO2 at these timepoints. The changes in sO2 were further corroborated with histological data, using the vascular and perfusion markers CD31 and FITC-lectin. These results allowed us to further surmise a plausible mechanism of the cellular events taking place in the TSL treated tumor regions over the first 24 hours post-treatment. The potential for using photoacoustic imaging to measure tumor sO2 as a surrogate prognostic marker for predicting therapeutic outcome with a TSL treatment is demonstrated.