A liposome-encapsulated form of the semi-synthetic doxorubicin analogue annamycin with antineoplastic activity. Annamycin intercalates into DNA and inhibits topoisomerase II, resulting in the inhibition of DNA replication and repair and RNA and protein synthesis. This agent circumvents multidrug-resistance (MDR) transporters, including P-glycoprotein (P-gp). Liposomal annamycin is less toxic and shows improved antitumor activity compared to annamycin.