Animal and clinical data show that high ratios of the area under the concentration-time curve and the peak concentration in blood to the MIC of fluoroquinolones for a given pathogen are associated with a favorable outcome. The present study investigated whether improvement of the therapeutic potential of ciprofloxacin could be achieved by encapsulation in polyethylene glycol (PEG)-coated long-circulating sustained-release liposomes. In a rat model of unilateral Klebsiella pneumoniae pneumonia (MIC = 0.1 µg/ml), antibiotic was administered at 12- or 24-h intervals at twofold-increasing doses. A treatment period of 3 days was started 24 h after inoculation of the left lung, when the bacterial count had increased 1,000-fold and some rats had positive blood cultures. The infection was fatal within 5 days in untreated rats. Administration of ciprofloxacin in the liposomal form resulted in delayed ciprofloxacin clearance and increased and prolonged ciprofloxacin concentrations in blood and tissues. The ED₅₀ (dosage that results in 50% survival) of liposomal ciprofloxacin was 3.3 mg/kg of body weight/day given once daily, and that of free ciprofloxacin was 18.9 mg/kg/day once daily or 5.1 mg/kg/day twice daily. The ED₉₀ of liposomal ciprofloxacin was 15.0 mg/kg/day once daily compared with 36.0 mg/kg/day twice daily for free ciprofloxacin; 90% survival could not be achieved with free ciprofloxacin given once daily. In summary, the therapeutic efficacy of liposomal ciprofloxacin was superior to that of ciprofloxacin in the free form. PEG-coated liposomal ciprofloxacin was well tolerated in relatively high doses, permitting once daily administration with relatively low ciprofloxacin clearance and without compromising therapeutic efficacy.