Efficacy and tolerability of liposomal amphotericin B (L-AMP-LRC-1; developed in India by the Liposome Clinical Pharmacology Centre, Mumbai, and the Liposome Research Centre, New Delhi) were assessed in 63 patients suffering from visceral leishmaniasis at centres in Mumbai and Patna. Patients were treated with different daily dose schedules ranging from 1 mg/kg for 21 days to 3.0 mg/kg for 7 days. L-AMP-LRC-1 was well tolerated by all 63 patients. Two patients on the 3.0 mg/kg dose developed bronchospasm on 4 occasions which reversed with standard treatment and could be prevented by increasing the duration of infusion to 3 h. Forty-three patients were freshly diagnosed cases while 20 were unresponsive to standard treatment. All 42 assessable freshly diagnosed cases responded completely to L-AMP-LRC-1 (1 patient died owing to pulmonary infection before completion of treatment), but 5 patients required additional doses for parasitological cure. All 20 patients unresponsive to standard therapy responded completely, but 3 patients required additional doses. The regimen of 2 mg/kg daily for 10 days was 100% effective; 3 mg/kg daily for 5 days was efficacious in 90.9% freshly diagnosed patients, and 3 mg/kg daily for 7 days was effective in 100% of the unresponsive cases of visceral leishmaniasis. L-AMP-LRC-1 is thus found to be safe and effective in freshly diagnosed as well as unresponsive cases of visceral leishmaniasis at dose schedules of shorter duration than used for conventional amphotericin B.