Encapsulating cytotoxic drugs in liposomal vehicles allows for the targeting of tumors while protecting the drugs from premature degradation. 1,25-Dihydroxyvitamin D3-3?-bromoacetate (1,25(OH)2D3-3-BE), a vitamin D receptor-alkylating agent inhibits the growth of prostate cancer cells. The aim of the study was to evaluate the efficacy of a liposomal preparation of 1,25(OH)2D3-3-BE versus 1,25(OH)2D3-3-BE in modulating the growth of prostate cancer cells. Results demonstrate that liposomal 1,25(OH)2D3-3-BE is significantly better than 1,25(OH)2D3-3-BE in inhibiting the growth. In addition, liposomal 1,25(OH)2D3-3-BE was found to be stable in human serum. Taken together, results of the studies delineated here suggest a therapeutic potential of liposomal 1,25(OH)2D3-3-BE in prostate cancer.