In the management of metastatic breast cancer, fewer recognized therapeutic standards are available as compared to the early stages of the disease. Thus, it is pertinent to search for new, effective therapy to improve survival, tolerability and quality of life of patients. In this study, a liposomal formulation was developed for a novel dihydrofolate reductase (DHFR) inhibitor, M-V-05. Drug encapsulation into liposomes was achieved by the citrate-based, pH gradient loading technique, with a final drug-to-lipid weight ratio of 0.1:1. The liposome formulation exhibited a sustained release profile of the encapsulated drug that followed first order release kinetics. Liposomal M-V-05 was found to be more effective than the standard DHFR inhibitor, methotrexate, and its activity was comparable to liposomal doxorubicin, with IC50 values of 37 and 59 microM achieved in MDA-MB-231 and JIMT-1 cells, respectively. Similar cytotoxicity was observed in primary patient samples of invasive ductal carcinoma of the breast. The combination of liposomal M-V-05 and liposomal doxorubicin in fixed molar ratio of 3:1 was additive in cytotoxicity, allowing the concentrations of liposomal doxorubicin and liposomal M-V-05 to be reduced by 62 and 46%, respectively. Taken together, liposomal M-V-05 represents a promising agent and offers a potential new adjuvant therapy for breast cancer treatment.