Potential therapeutic applications of recently developed liposomes with a reduced affinity to the reticuloendothelial systems and a prolonged circulation time as targeting systems for lipophilic prodrugs were examined. In these studies, liposomes composed of phosphatidylcholine and cholesterol, additionally containing monosialoganglioside (GM1) or polyethylene glycol conjugated to phosphatidyl-ethanolamine (PEG-PE), were used. Three antitumor lipophilic prodrugs, N-trifluoroacetyl-adriamycin-14-valerate (AD32), araC-diphosphate-diglyceride (araCdPdG), and 3′,5′-o-dipalmitoyl-5-fluoro-2′-deoxyuridine (dpFUdR), were used to examine the effect of lipophilic prodrug incorporation into long-circulating liposomes and immunoliposomes on their biodistribution in mouse. Biodistribution studies with antibody-free liposomes containing lipophilic prodrugs showed that the activities of GM1 or PEG2000-PE in prolonging the circulation time of liposomes appeared to be preserved in the presence of each of the three lipophilic prodrugs at a drug/lipid molar ratio of 3:97. The effect of lipophilic prodrug incorporation on target binding of immunoliposomes was then examined using a mouse model. Incorporation of AD32 or dpFUdR into immunoliposomes, directed to the normal endothelium, did not affect the targetability of immunoliposomes, suggesting a potential effectiveness of these lipophilic prodrug-containing immunoliposomes in therapy for lung tumors. On the contrary, incorporation of araCdPdG resulted in significantly reduced target binding of immunoliposomes by yet unknown mechanism(s).