We have reported that targeted, pH-sensitive sterically stabilized liposomes are able to increase the cytotoxicity of DXR in vitro against B lymphoma cells, but the rate of release of DXR in plasma was too rapid to permit the results to be extended to in vivo applications. The purpose of the study reported here is two-fold. First, to understand the mechanism of the rapid release of DXR from pH-sensitive sterically stabilized liposomes (PSL) in human plasma. Second, to reformulate the above liposomes to improve their drug retention, while retaining their pH sensitivity. The stability of the PSL formulations in human plasma was evaluated by comparing the rate of release of encapsulated DXR with that of HPTS, a water-soluble fluorescent marker. Since DXR, but not HPTS, a water soluble-less membrane permeable fluorescence marker, was rapidly released from liposomes in the presence of plasma, the rapid release of DXR is likely caused by the diffusion of DXR molecules through the lipid bilayer, not by the disruption of the membrane. In order to develop more stable PSL formulations, various molar ratios of the membrane rigidifying lipid, hydrogenated soy HSPC and/or CHOL, were added to the lipid composition and the rate of release of encapsulated solutes and pH-sensitivity were evaluated. The compositions that showed the best drug retention and pH-sensitivity were a mixture of DOPE/HSPC/CHEMS/CHOL/mPEG(2000)-DSPE at a molar ratio of 4:2:2:2:0.3 and DOPE/HSPC/CHEMS/CHOL at a molar ratio of 4:2:2:2. Our formulations, if targeted to internalizing antigens on cancer cells, may increase intracellular drug release rates within acidic compartment, resulting in a further increase in the therapeutic efficacy of targeted anticancer drug-containing liposomes.