Pentamidine isethionate, widely used for the treatment of parasitic infections, has shown strong anticancer activity in cancer cells and models of melanoma and lung cancer. Systemic administration of pentamidine is associated with serious toxicities, particularly renal, affecting as many as 95% of patients (O'Brien et al., 1997). This work presents the development of a liposome pentamidine formulation for greater tumor accumulation and lower drug exposure to vulnerable tissues. Liposomes formulated with saturated/unsaturated phospholipids of different chain lengths, varying cholesterol content, and surface PEG were explored to understand the effects of such variations on drug release, encapsulation efficiency, stability and in vivo performance. Saturated phospholipids with longer chain lengths, higher cholesterol content and PEG resulted in greater stability. The optimal formulation obtained showed significantly lower clearance rate (3.6 ± 1.2 mL/h/Kg) and higher AUC0-inf (348 ± 31 μmol/L × h) in vivo when compared to free drug (414 ± 138 mL/h/Kg and 2.58 ± 0.74 μmol/L × h, respectively). In tumor-bearing mice, liposomal delivery decreased kidney drug levels by up to 5-fold at 6 and 24h post-administration. Tumor drug exposure was up to 12.7-fold greater with liposomal administration compared to free drug. Overall, the liposomal pentamidine formulation developed has significant potential for the treatment of solid tumors.