Suicide gene therapy based on ganciclovir (GCV) metabolism by transgene herpes simplex thymidine kinase (HSV-1 TK) has been used to selectively kill proliferating cells in clinical settings such as cancer, vascular restenosis, and immunological disorders. We investigated whether encapsulation of ganciclovir (GCV) into liposomes would improve its efficacy, especially against hepatic tumors. Large unilamellar liposomes containing GCV were prepared by reversed-phase evaporation. Pharmacokinetic studies in rats showed that, compared with free GCV, the intravenous injection of liposome-encapsulated GCV (lip-GCV) led to a faster decrease in GCV plasma concentrations, but higher liver-blood ratios. After treatment of syngeneic HSV-1 TK+ liver metastases in rats, histologically active tumors were found in 95% of the transplanted lesions when physiological saline had been given and in 50% when free GCV had been given at 90.2 microM/kg twice daily. This dose is known to be insufficient for the eradication of HSV-1 TK+ tumors. In contrast, only 5% viable tumors were found in rats receiving lip-GCV at this same concentration. Average tumor volumes were 19 +/- 15, 7 +/- 9, and <1 mm3 for the control, free GCV, and lip-GCV groups, respectively. GCV-related toxicity was no longer observed. The results demonstrate that liposomal encapsulation of GCV is feasible and significantly enhances its efficacy against HSV-1 TK+ hepatic tumors.