The potential and limitations of targeted delivery of anticancer agents with colloidal particulate carriers is the subject of this contribution. Because over the years liposomes have gained the most attention as carrier system in the category of colloidal carrier systems, this paper focuses on the utility of the liposomal system for tumor targeting. It is imperative that an intended therapeutic application of liposomes should be well matched with the liposome behavior in vivo. Therefore, the in vivo fate of the first-generation liposomes and the more recently developed second-generation liposomes (surface-modified liposomes such as the immunoliposomes and long-circulating liposomes) is analyzed in terms of accessibility of target sites, time-, and site-controlled drug release and potential target sites for rational targeted delivery are discussed. A few examples of areas in cancer chemotherapy, with a strong rationale for the use of liposomes, are given. It is concluded that, although several options are available on the drawing board, issues such as tumor cell heterogeneity, access to the target site, shedding of antigens, and target site-specific release of the liposome-associated drug need to be addressed early in the development process.