Formulations of ultra-deformable liposomes containing bleomycin (Bleosome) have previously been described and proposed for topical treatment of skin cancer [Lau, K.G., Chopra, S., Maitani, Y., 2003. Entrapment of bleomycin in ultra-deformable liposomes. S. T. P. Pharm. Sci. 13, 237-239]. In this study, the stability of various Bleosome formulations was characterised and a purification process was established to isolate Bleosome for testing on cultures of either human cutaneous keratinocytes (NEB-1) immortalised by human papilloma virus (HPV)-type 16, or a spontaneously immortalised human squamous cell carcinoma (SCC) from a primary tumour. Bleosome facilitated entrapment of high concentrations of active bleomycin and samples purified by gel-filtration chromatography remained stable during 7 days of storage at 4 degrees C or at room temperature. Serially-diluted samples of this purified, high-strength product, 'high dose' were applied onto keratinocyte cell cultures to elucidate Bleosome LD50 profiles. In vitro data revealed that the LD50 of bleomycin encapsulated in Bleosome was approximately three-fold higher than free bleomycin solution for SCC cells, and nearly 30 times higher for NEB-1 cells. However, Bleosome containing 30 microg/ml of active bleomycin killed more than twice as many SCC cells than NEB-1 cells. At that concentration, the potency of liposomal bleomycin on causing cell death of SCC cells was found to be similar to that of free bleomycin solution. This effect was not seen on NEB-1 cells. It seems that SCC cells were particularly susceptible to Bleosome containing high levels of bleomycin. Results from these experiments promote the development of a novel product for the topical treatment of skin cancer.