Clofazimine, a potent antimycobacterial drug, being highly lipophilic accumulates in fatty tissue and in the reticuloendothelial system causing dose-dependent side effects. In this study, the distribution of the free drug and liposome-associated drug was compared after intravenous administration in mice. Differences in the distribution of the drug were observed in the liver, spleen, kidney and lung tissues when injected as free drug and as liposome-associated drug. Following intravenous challenge with the free drug, the drug accumulated quickly and high concentrations of the drug were seen in the spleen, liver, kidney and lung even after 24 h, indicating poor clearance. However, with liposome-associated drug, increased levels were seen in liver, spleen and lung at 1 h with levels falling considerably at 24 h, with no accumulation in the kidney either at 1 h or 24 h after challenge. Clofazimine associated with neutral liposomes was preferentially targetted to spleen and lung, positively charged liposome-associated drug accumulated more in the lungs than in other tissues, while negatively charged liposome-associated drug was directed to liver and spleen. The results suggest that inclusion of clofazimine into liposome not only targets the drug to the organs concerned but also facilitates clearance of the drug, resulting in little accumulation. Also, renal accumulation is much lower as compared to the free drug. This suggests the potential usefulness of liposome as a carrier for clofazimine, thereby reducing the harmful side effects due to excessive accumulation of the drug.