This review deals with the current status of newly developed pendant-type PEG-immunoliposomes (Type C), carrying monoclonal antibodies or their fragments (Fab') at the distal ends of the PEG chains. In terms of target binding of Type C, two different anatomical compartments are considered. They are mouse lung endothelium as a readily accessible site via the intravascular route and the implanted solid tumor as a much less accessible target site reached via extravasation. Small unilamellar liposomes (90-130 nm in diameter) were prepared from phosphatidycholine and cholesterol (2:1, m/m) containing 6mol.% of DSPE-PEG-COOH or DPPE-PEG-Mal. For targeting to the vascular endothelial surface in the lung, 34A antibody, which is highly specific to mouse pulmonary endothelial cells, was conjugated to PEG-liposomes (34A-Type C). The degree of lung binding of 34A-Type C in BALB/c mouse was significantly higher than that of 34A-Type A, which is an ordinary type of immunoliposome (without PEG derivatives). For targeting to solid tumor tissue, 21 B2 antibody (anti-human CEA) and its Fab' fragment were used. The targeting ability of Fab'-Type C was examined by using CEA-positive human gastric cancer strain MKN-45 cells inoculated into BALB/c nu/nu mice. Fab'-Type C showed low RES uptake and a long circulation time, and enhanced accumulation of the liposomes in the solid tumor was seen. The small Fab'-Type C predominantly passed through the leaky tumor endothelium by passive convective transport. These studies offer important insights into the potential of Type C liposomes for target-specific drug delivery.