Objectives: In the present study we evaluated the pharmacokinetics and toxicity of amphotericin B in immunomodulator tuftsin-loaded liposomes in a murine model. Methods: Stability of amphotericin B liposomes was tested by incubating one volume of liposomal formulations of amphotericin B with nine volumes of serum. The pharmacokinetics of amphotericin B in Candida albicans-infected mice treated with conventional and tuftsin-loaded amphotericin B liposomes was evaluated over a period of 24 h. In vitro toxicity of amphotericin B deoxycholate, as well as amphotericin B liposomes, was tested by incubation with human erythrocytes for 1 h at 37°C. To assess amphotericin B-induced in vivo toxicity, BALB/c mice were injected with three doses of amphotericin B deoxycholate, as well as amphotericin B liposomal formulations on days 1, 2 and 3 post C. albicans infection. Blood from treated mice was taken by retro-orbital puncture to test renal function parameters such as serum creatinine and urea. Results: In vitro stability studies revealed that tuftsin-bearing amphotericin B liposomes released only 11% of the total liposomal amphotericin B in the serum, while it was found to be 19% from identical tuftsin-free amphotericin B liposomes. Both tuftsin-loaded as well as tuftsin-free liposomal formulations of amphotericin B induced ∼20% haemolysis of erythrocytes at a dose of 40 mg/L, while the same amount of drug in amphotericin B deoxycholate caused 100% lysis of the erythrocytes. Pharmacokinetic studies revealed that subsequent to administration of various formulations of amphotericin B, there was 32 mg/L amphotericin B in the systemic circulation of mice treated with tuftsin-bearing amphotericin B liposomes, while it was 25 mg/L for amphotericin B liposomes, 4 h post drug administration. In vivo toxicity studies demonstrated that the amphotericin B deoxycholate formulation induced elevations in serum creatinine (∼300% of control) and blood urea (∼380% of control) values, while these values were substantially less (blood urea ∼150% of control and serum creatinine ∼210% of control) in the animals treated with the tuftsin-loaded amphotericin B liposomal formulation. Further, the administration of amphotericin B deoxycholate (1 mg/kg) in BALB/c mice at a dose of 1 mg/kg body weight led to the accumulation of 18.6 ± 5.25 g/kg (of amphotericin B) in kidneys. On the other hand, administration of liposomal amphotericin B and tuftsin-bearing liposomal amphotericin B at a dose of 5 mg/kg body weight resulted in accumulation of 8.8 ± 2.0 and 4.0 ± 1.6 g/kg of amphotericin B, respectively, in the kidneys of treated animals. Conclusions: Co-administration of immunomodulator tuftsin along with liposomal formulations of amphotericin B successfully minimizes toxicity, as well as other side effects of the drug. Interestingly, tuftsin also increased the stability of liposomal amphotericin B. Superior efficacy, reliable safety and favourable pharmacodynamics of tuftsin-loaded amphotericin B liposomes suggest their potential therapeutic value in the management of fungal infections.