The in-vitro and in-vivo toxicity and activity of a new emulsion-based delivery system for amphotericin B (AmB-E) and of deoxycholate-amphotericin B (Fungizone) were studied. In vitro, Candida albicans and human red blood cells (RBCs) were treated with either product and dose-response curves for various cellular effects (changes in potassium cell content, haemoglobin leakage from RBCs and colony-forming ability of fungal cells) were obtained. AmB-E was less toxic than Fungizone against human RBCs and equally active against C. albicans cells. In-vivo studies showed that the LD50 of AmB-E and Fungizone in noninfected OF1 mice were 7.24 and 3.46 mg/kg, respectively. The therapeutic efficacy of AmB-E was assessed in murine candidiasis. Firstly, the efficacy of equal doses (0.8 mg/kg) of AmB-E and Fungizone was evaluated in infected mice. Both formulations increased the survival time compared to the control and were equally effective in reducing the cfu counts in the kidney. In the same model of infection, the maximum tolerated doses (MTD) of Fungizone and AmB-E were determined in order to study the efficacies of Fungizone and AmB-E at their respective MTD. AmB-E significantly increased the number of long-term survivors compared with Fungizone (MTD:2 and 1 mg/kg, respectively). Thus, AmB-E was more effective than Fungizone for treatment of systemic mycoses at the MTD.