Amphotericin B is the only antifungal drug which, despite its dose-limiting toxicity, can be given intravenously when an aggressive treatment is required. In an attempt to reduce the drug toxicity while retaining its therapeutic efficacy, new formulations of amphotericin B have been developed. The most promising have employed lipid vehicles such as liposomes. Three lipid-based amphotericin B formulations have been developed by pharmaceutical companies and are under active clinical investigation. Efficacy and safety data of these derivatives in animals and humans are reviewed, with particular concern to cryptococcal infection. The authors' experience with a small unilamellar liposomal amphotericin B formulation, AmBisome, in the primary therapy of cryptococcosis is reported. Nine AIDS patients affected with cryptococcosis, seven of whom had meningitis, were given AmBisome (3 mg/kg/day) for 3-6 weeks. Complete response was obtained in six patients, marked improvement in two, and failure in one. AmBisome was well tolerated and shortened the time to clinical and mycological response suggesting a further improvement in the management of cryptococcosis in AIDS patients.