The new concept developed in this study is the preparation of a new derivative of erythrocyte ghosts, i.e., membrane vesicles loaded with doxorubicin (Dox) HCl and coupled to folic acid to improve cancer chemotherapy. N-hydroxysuccinimide (NHS) folate was then conjugated to membrane vesicles. These membrane vesicles were extensively characterized for in vitro and in vivo performance. The vesicle size obtained was in the range of 1.2-1.5 microm and in vitro release profile showed 51.8 and 38.7% of drug release in case of Dox-V and Dox-FV, respectively, in 16 hr. The stability studies were performed at 4 degrees C by assessing the effect on vesicle size and leakage after 7, 15, and 21 days. The stability study showed negligible leakage and no appreciable change in the vesicle size after storage for several days in both formulations. The cytostatic activity was assessed and found that IC50 was decreased 3.2 and 2.1 times for Dox-FV compared with free drug and Dox-V, respectively. The cytotoxic activity showed similar profile among the formulations: order of toxicity was Dox-FV > Dox-V > free drug. The mean survival time was found in order of Dox-FV > Dox-V > free drug > control (FV). The increase in life for Dox-FV was 212.9%. Overall, this folic acid conjugated vesicle system proved to be a potential delivery system for improved cancer therapy.