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Notes: Abstract. The in vitro cytotoxicity, cellular pharmacology, and DNA lesions induced by the lipophilic anthracycline annamycin (Ann) were studied in KB and KB-V1 (multidrug-resistant) cells. Ann was tested in suspension in saline and 10% dimethylsulfoxide (DMSO: final concentration, 0.05% – 0.5%) or entrapped in multilamellar liposomes (median size, 1.57 μm). Doxorubicin (Dox) was about twice as cytotoxic as Ann or liposome-entrapped Ann (L-Ann) against KB cells. Both Ann and L-Ann displayed a partial lack of cross-resistance with Dox (resistance indices: 〉60 for Dox, 4.7 for Ann, 4.0 for L-Ann). Accumulation of Ann in KB and KB-V1 cells was consistently about 2 – 3 and 10 – 20 times higher, respectively, than that of Dox. Cellular retention of Ann in KB and KB-V1 cells was about 2 and 30 times higher, respectively, than that of Dox as a result of the different efflux patterns of the two drugs: Dox was not effluxed from KB cells but was significantly effluxed from KB-V1 cells (66% at 1 h, whereas Ann efflux was similar in both cell lines (about 50% at 1 h). Dox retention in KB-V1 cells was increased by a factor of 2 in the presence of verapamil or cyclosporine A, but Ann retention was not. In addition, accumulation of Dox in KB-V1 cells was enhanced by the metabolic inhibitor deoxyglucose/azide and the membrane carboxylic ionophore monensin, whereas accumulation of Ann was not affected by either agent. All these findings indicate significant differences in the cellular transmembrane transport systems between Dox and Ann and suggest that Ann efflux is not mediated by P-glycoprotein. Liposome entrapment reduced by a factor of 1.3 – 2.0 the cellular accumulation of Ann without affecting its cytotoxicity. As compared with Dox, both Ann and L-Ann induced 3 times more DNA double- and single-strand breaks in KB cells. In KB-V1 cells, Dox did not induce DNA damage, whereas the extent of DNA breaks induced by both Ann and L-Ann was similar to that induced by Dox in KB cells. Our results indicate (1) that the lack of cross-resistance between Ann and Dox is associated with a markedly enhanced accumulation and retention of Ann in KB-V1 cells and (2) that the type of liposomes used does not significantly affect the cellular effects of Ann.