A liposomal amphotericin B preparation (L-AMP-LRC-1) has been developed and tested successfully in adults by us. This preparation was administered to 23 neonates with candidiasis in an open phase II study. All the 14 assessable patients responded completely to the L-AMP-LRC-1 therapy given at 1 mg/kg for 28 days. Compared to AmBisome, another liposomal formulation of amphotericin B, L-AMP-LRC-1 was effective at lower dose in neonatal candidiasis. Thus L-AMP-LRC-1 appears to be an effective and low cost drug for the treatment of candidiasis.