Immunocompromised patients are well known to be predisposed to developing invasive fungal infections. These infections are usually difficult to diagnose and more importantly, the resulting mortality rate is high. The limited number of antifungal agents available and their high rate of toxicity are the major factors complicating the issue. However, the development of lipid-based formulations of existing antifungal agents has opened a new era in antifungal therapy. The best examples are the lipid-based amphotericin B preparations, amphotericin B lipid complex (ABLC; Abelcet), amphotericin B colloidal dispersion (ABCD; Amphotec or Amphocil), and liposomal amphotericin B (AmBisome). These formulations have shown that antifungal activity is maintained while toxicity is reduced. This progress is followed by the incorporation of nystatin into liposomes. Liposomal nystatin formulation is under development and studies of it have provided encouraging data. Finally, lipid-based formulations of hamycin, miconazole, and ketoconazole have been developed but remain experimental. Advances in technology of liposomes and other lipid formulations have provided promising new tools for management of fungal infections.