The aims of this phase I study were to establish the maximum tolerated dose, safety profile and activity of liposomal daunorubicin, DaunoXome (NeXstar Pharmaceuticals), in the treatment of metastatic breast cancer. DaunoXome was administered intravenously over 2 h in 21 day cycles and doses were increased from 80 to 100, 120 and 150 mg m 2 . Sixteen patients were enrolled. A total of 70 cycles of DaunoXome were administered. The maximum tolerated dose was 120 mg m 2 , the dose-limiting toxicity being prolonged grade 4 neutropenia or neutropenic pyrexia necessitating dose reductions at 120 and 150 mg m 2 . Asymptomatic cardiotoxicity was observed in three patients: grade 1 in one treated with a cumulative dose of 800 mg m 2 and grade 2 in two, one who received a cumulative dose of 960 mg m 2 and the other a cumulative dose of 600 mg m 2 with a previous neoadjuvant doxorubicin chemotherapy of 300 mg m 2 . Tumour response was evaluable in 15 patients, of whom two had objective responses, six had stable disease and seven had progressive disease. In conclusion, DaunoXome is associated with mild, manageable toxicities and has anti-tumour activity in metastatic breast cancer. The findings support further phase II evaluation of DaunoXome alone and in combination with other standard nonanthracycline cytotoxic or novel targeted agents. Although the dose-limiting toxicity for DaunoXome was febrile neutropenia at 120 mg m 2 , we would recommend this dose for further evaluation, as the febrile neutropenia occurred after four or more cycles in three of the four episodes seen, was short lived and uncomplicated.