Microvascular permeability and interstitial penetration of sterically stabilized liposomes in both normal s.c. tissue and human colon adenocarcinoma LS174T xenograft were quantified by using the dorsal skinfold chamber implanted in severe combined immunodeficient mice and intravital fluorescence microscopy. Significant extravascular accumulation was the dominant feature of liposome distribution in tumors, whereas only minimal intramural accumulation in postcapillary and collecting venules was observed in normal s.c. tissue. The extravasated liposomes in tumors distributed heterogeneously and formed perivascular clusters that did not move significantly and could be observed for up to 1 week. The effective permeability of tumor vessels to liposomes (2.0 ± 1.6 × 10^-8 cm/s; n = 23) was six times smaller than that to bovine serum albumin (1.2 ± 0.5 × 10^-7 cm/s; n = 6). These results provide new insights into the mechanisms of transendothelial pathways of liposomes and improvements in liposome-mediated drug delivery.