To determine the safety and efficacy of liposomal amphotericin B (AmBisome) in the primary treatment of AIDS-associated cryptococcosis. A Phase II, multicentre, European, non-comparative, open study to assess the use of AmBisome in 23 patients (26 enrolments) with cryptococcosis. Dose requirements, mycological response and toxicity were documented. Hospital-based HIV units. Twenty-three HIV-1-seropositive patients. Drug toxicity, assessed in 25 enrolments, was well-tolerated with little renal, hepatic or haematological toxicity. Eighteen out of 23 (78%) enrolments responded clinically. Nineteen enrolments had cryptococcal meningitis: sterilization of spinal fluid was achieved in 12 out of the 18 (67%) who were mycologically evaluable. Fourteen out of the 19 (74%) responded clinically. AmBisome is well-tolerated and may be an effective formulation in the treatment of cryptococcosis.