The objective of our studies is the development of a novel formulation of nystatin (NYT) that could be administered systemically and might be used for therapy of invasive mycoses. We developed a formulation of nystatin and intralipid (IL), which is a clinically used food supplement, and this report focuses on the characterization of NYT-IL, assessment of its antifungal activity and in vitro toxicity. We characterized physical properties of the NYT-IL preparation and its stability during storage. Susceptibility of Candida, Aspergillus and Fusarium species was determined using a CLSI technique. In vitro toxicity of NYT-IL was assessed using an assay measuring hemolysis of sheep red blood cells (SRBC) and leakage of potassium. It was found that: (1) the particle size in NYT-IL did not differ from that of IL; (2) over 80% of NYT was in association with IL; and (3) these features did not change during storage. All Candida and Aspergillus strains had lower minimal inhibitory concentration (MIC) values for NYT-IL than that for NYT; the MICs of the Fusarium strains were similar for NYT & NYT-IL. Toxicity assays showed that the NYT-IL formulation is less toxic than NYT. In conclusion, we describe a novel, characterized, stable formulation of nystatin, nystatin-intralipid, with in vitro activity against pathogenic Candida and Aspergillus species.