Paclitaxel (Taxol) is a diterpenoid isolated from Taxus brevifolia, used clinically for the treatment of ovarian and breast cancer. Due to its aqueous insolubility it is administered dissolved in ethanol and Cremophor EL (polyethoxylated castor oil), which has serious side effects. In order to eliminate this vehicle, in previous work we entrapped paclitaxel in conventional and in polyethylene glycol coated liposomes. However, in neither formulation did we obtain satisfactory entrapment efficiency. In this study we increased the paclitaxel concentration entrapped in liposomes by incorporating different water-soluble prodrugs, such as the 2'-succinyl, 2'-methylpyridinium acetate and 2'-mPEG ester paclitaxel derivatives, in the lipid vesicles. Liposomes containing 2'-mPEG (5000)-paclitaxel showed the best performance in terms of stability, entrapment efficiency and drug concentration (6.5 mgml(-1)). The in vitro cytotoxic activity of this liposomal prodrug was similar to that of the parent drug. The pharmacokinetic parameters for the free and for the liposomal prodrugs fitted a bi-exponential plasma disposition. The most important change in pharmacokinetic values of the prodrug vs. the free drug liposomal formulations was t(1/2)beta, plasma lifetime, which was longer in liposomes containing 2'-mPEG (5000)-paclitaxel.