Liposomal cytarabine (Depocyte) is a sustained-release formulation of cytarabine developed for intrathecal administration, ensuring prolonged cytotoxic drug concentrations of cytarabine in cerebrospinal fluid. Although liposomal cytarabine is increasingly used for the treatment (and prophylaxis) of CNS involvement in patients with leukemia/lymphoma, many of the recently presented clinical trials on liposomal cytarabine were retrospective in nature or used this drug on a compassionate basis. So far, one randomized Phase III study has shown significantly better response rates in patients with lymphomatous meningitis who received liposomal cytarabine compared with free cytarabine. Considerable concerns about the safety of this drug arose from recent observations that liposomal cytarabine might contribute to neurologic side effects when given too closely to high-dose systemic chemotherapy known to penetrate the brain-blood barrier. Superior efficacy of liposomal cytarabine compared with standard intrathecal therapy should be confirmed in prospective clinical trials. Careful adherence with preventive measures might help physicians to minimize side effects possibly related to the administration of liposomal cytarabine.