Increased neovascularization and vascular hyperpermeability are integral processes in tumors, and various therapeutic strategies seek to reverse the angiogenic phenotype. Long-circulating liposomes extravasate in tumors such as the rat 9L gliosarcoma and accumulate in perivascular areas. Under such conditions, liposome-encapsulated doxorubicin (DOX) provides approximately 30% increase in life span, but free DOX is no more beneficial than a saline control. However, the relationship between drug deposition and therapeutic effect is understood poorly. In the present work, magnetic resonance (MR) and functional MR (fMR) imaging were used for noninvasive, serial evaluation of intracranial 9L tumor responses to repetitive doses of free DOX or DOX in sterically stabilized long-circulating liposomes (SSL-DOX). After multiple doses of SSL-DOX, MR imaging revealed the induction of intratumor hemorrhage in 63-75% of rats (n = 8). No hemorrhage was observed by MR imaging after a single dose of SSL-DOX, in normal brain regions in animals treated with free DOX (n = 3) or in saline controls (n = 9). Histological sections from rats sacrificed immediately after MR imaging verified the putative hemorrhagic regions and revealed necrotic and apoptotic tumor cells surrounding the area of the hemorrhage. fMR maps were obtained by comparing paired images acquired during air and Carbogen (7% CO2 and 93% oxygen) breathing. These blood oxygenation level-dependent fMR maps showed enhanced image intensity after both single and multiple doses of SSL-DOX, which suggested increased and progressive vascular permeabilization. The results suggest that the breakdown of tumor vasculature induced by SSL-DOX may arise from the perivascular accumulation of liposomes in tumor and cytotoxic effects on tumor vascular endothelium.