N4-alkyl-1-beta-D-arabinofuranosyl cytosines as lipophilic derivatives of the widely used anti-tumor drug 1-beta-D-arabinofuranosylcytosine (ara-C) were synthesized and incorporated into unilamellar liposomes. The resulting preparations yielded stable unilamellar liposomes with diameters ranging between 40 and 70 nm. The liposomal derivatives exhibited an increased anti-tumor effect against the murine L1210 lymphoid leukemia at optimal molar concentrations which were 16 times lower than those previously reported for free ara-C. The N4-alkyl-ara-C derivatives with alkyl chains containing 14-16 C-atoms were highly effective against L1210 leukemia whereas shorter chains showed no cytostatic effects. The increased resistance to hydrolysis of the N4-alkyl-ara-C derivatives and the improved anti-tumor effect of the liposomal N4-hexadecyl-ara-C preparation compared to other known N4-acyl-ara-C prodrugs, together with the possibility of preparing large volumes of stable and sterile liposomes, hold out the prospect of more effective chemotherapy for leukemias.