Invasive fungal infection is a problem in patients undergoing bone marrow transplantation (BMT). To determine if a liposomal formulation of amphotericin B (Ambisome) is safe and can prevent fungal infection we performed a placebo controlled double-blind randomized prophylactic trial. Study drug was administered from when neutrophil count had decreased to < 0.5 x 10(9)/l and was continued until neutrophils recovered to this level or an infection or toxicity end-point was reached. Thirty-six patients received 1 mg/kg/day of ambisome and 40 patients received placebo daily. There were no statistical differences in characteristics or clinical course between the two groups. Fungal colonization decreased in the ambisome group while it increased in the placebo group. By the end of prophylaxis 8 of 24 (33%) patients receiving ambisome were colonized compared with 18 of 29 (62%) placebo patients (p = 0.05). Five and 7 patients on ambisome or placebo, respectively, were withdrawn due to a presumed fungal infection (NS). There was no statistical reduction of autopsy-proven fungal infection. Proven fungal infection occurred in one patient receiving ambisome (C. guillermondi) compared with three patients receiving placebo (C. guillermondi, 2; C. albicans, 1). Ambisome was well tolerated at the dose of 1 mg/kg/day but in three patients allergic reactions were observed.