Central nervous system (CNS) prophylaxis has led to a significant improvement in the outcome of patients with acute lymphocytic leukemia (ALL). Liposomal cytarabine (Enzon Pharmaceuticals, Piscataway, NJ; Skye Pharma, San Diego, CA), an intrathecal (IT) preparation of cytarabine with a prolonged half-life, has been shown to be safe and effective in the treatment of neoplastic meningitis. Liposomal cytarabine was given for CNS prophylaxis to 31 patients with newly diagnosed ALL. All patients were treated concurrently with hyper-CVAD chemotherapy (fractionated cyclophosphamide, vincristine, doxorubicin, and dexamethasone) including high-dose methotrexate (MTX) and cytarabine on alternating courses. Liposomal cytarabine 50 mg was given intrathecally on days 2 and 15 of hyper-CVAD and day 10 of high-dose MTX and cytarabine courses until completion of either 3, 6, or 10 IT treatments, depending on risk for CNS disease. Five patients (16%) experienced serious unexpected neurotoxicity, including seizures, papilledema, cauda equina syndrome (n = 2), and encephalitis after a median of 4 IT administrations of liposomal cytarabine. Toxicities usually manifested after the MTX and cytarabine courses. One patient died with progressive encephalitis. After a median follow-up of 7 months, no isolated CNS relapses have been observed. Liposomal cytarabine given via intrathecal route concomitantly with systemic chemotherapy that crosses the blood-brain barrier such as high-dose MTX and cytarabine can result in significant neurotoxicity.