Cytarabine (cytosine arabinoside, Ara-C) is an effective chemotherapeutic agent for the treatment of acute myelogenous leukaemia and lymphocytic leukaemias. As cytarabine is an S-phase-specific drug, prolonged exposure of cells to cytotoxic concentrations is critical to achieve maximum cytotoxic activity. However, the activity of cytarabine is decreased by its rapid deamination to the biologically inactive metabolite uracil arabinoside. This rapid deamination is the reason for the ongoing search for effective formulations and derivatives of cytarabine that cannot be deaminated and exhibit better pharmacokinetic parameters. Protection of cytarabine from fast degradation and elimination has been investigated by encapsulating the drug into pharmaceutically acceptable carriers. Cytarabine derivatives have shown promise in vitro and in animal models. For example, ancitabine (cyclocytidine), enocitabine and cytarabine ocfosfate have been used clinically in Japan. Cytarabine encapsulated into multivesicular liposomes has been approved in several countries for the intrathecal treatment of lymphomatous meningitis. Although many compounds have been investigated, few cytarabine derivatives are currently available for clinical use. Further research is needed to improve the efficacy of cytarabine against haematological and solid tumours.