The lymphatic absorption and tissue distribution of free [14C]Adriamycin, "empty" [3H]liposomes, free [14C]Adriamycin plus empty [3H]liposomes, and [14C]Adriamycin entrapped into [3H]liposomes have been examined at intervals after i.p. injection into rats. Following treatment with empty [3H]liposomes, almost 30% of the liposomal lipid marker was recovered in 24-hr thoracic duct lymph, but when [14C]Adriamycin was added to or encapsulated in liposomes, this value was reduced to 10%. Conversely, only 1% of free [14C]Adriamycin was recovered in 24-hr lymph, but liposomal encapsulation produced a six-fold increase in this value. Studies on the tissue distribution of the liposomal lipid marker after dosing with empty liposomes revealed uptake by diaphragm, liver and spleen, but the highest tissue concentrations were noted in lymph nodes. Liposomal encapsulation of Adriamycin altered its tissue disposition, chiefly by increasing the concentration of drug equivalents in diaphragm, liver and spleen. Although free Adriamycin was accumulated by lymph nodes to some extent, this lymph node accumulation was markedly enhanced by liposomal encapsulation and was present only in those nodes through which lymph draining the peritoneal cavity passes. This finding, together with the observation that diaphragm and thoracic duct lymph contain relatively high levels of liposomal lipid and Adriamycin equivalents, indicates that liposomes are selectively absorbed from the peritoneal cavity by lymphatics and are retained by certain lymph nodes. The results of this study suggest that i.p. administration of liposome-encapsulated drugs may provide a means of selectively concentrating anti-tumor agents in lymphatic channels and lymph nodes.