Diphtheria toxin (DT) has attracted considerable attention for anti-cancer therapy. However, its extensive use is prohibited by (i) its non-specific action which can result in substantial toxicity, (ii) most patients have low serum levels of anti-DT antibodies (AT antibodies) which can inactivate DT and (iii) its immunogenicity will boost the circulating AT antibody level, thereby further compromising the antitumor activity. To overcome these limitations, we have developed a new approach for targeted delivery of DT utilizing immunoliposomes. In this approach, protection against the non-specific action of DT is combined with efficient antitumor activity even in the presence of inactivating AT antibodies.