A liposome-encapsulated form of the hydrochloride salt of the anthracycline antineoplastic antibiotic doxorubicin. Doxorubicin intercalates between base pairs in the DNA helix, thereby preventing DNA replication and ultimately inhibiting protein synthesis. Additionally, doxorubicin inhibits topoisomerase II which results in an increased and stabilized cleavable enzyme-DNA linked complex during DNA replication and subsequently prevents the ligation of the nucleotide strand after double-strand breakage. Doxorubicin also forms oxygen free radicals resulting in cytotoxicity secondary to lipid peroxidation of cell membrane lipids. Liposomal delivery of doxorubicin HCL improves drug penetration into tumors and decreases drug clearance, thereby increasing the duration of therapeutic drug effects; a liposomal formulation of doxorubicin also modulates toxicity, specifically the cardiac effects commonly seen with anthracycline antitumor drugs.