We hypothesized that immunoliposomes (ILs) that target epidermal growth factor receptor (EGFR) and/or its truncated variant EGFRvIII can be constructed to provide efficient intracellular drug delivery in tumor cells overexpressing these receptors. Monoclonal antibody fragments included Fab' fragments derived from C225, which binds both EGFR and EGFRvIII, or novel anti-EGFR scFv C10, which binds EGFR only. Monoclonal antibody fragments were covalently linked to liposomes containing various reporters or drugs. ILs were evaluated for specific binding, internalization, and cytotoxicity in EGFR/EGFRvIII-overexpressing cell lines in vitro. Flow cytometry and fluorescence microscopy showed that EGFR-targeted ILs, but not nontargeted liposomes or irrelevant ILs, were efficiently bound and internalized by EGFR-overexpressing cells, including glioma cells (U-87), carcinoma cells (A-431 and MDA-MB-468), and EGFRvIII stable transfectants (NR-6M). Furthermore, EGFR-targeted ILs did not bind to non-EGFR-overexpressing cells (MCF-7 and parental NR-6). ILs showed 3 orders of magnitude greater accumulation in NR-6-EGFRvIII stable transfectants versus parental NR-6 cells. Quantitative internalization studies indicated binding of EGFR-targeted ILs to target cells within 5 min, followed by intracellular accumulation beginning at 15 min; total uptake reached approximately 13,000 ILs/cell. ILs were used to deliver cytotoxic drugs doxorubicin, vinorelbine, or methotrexate to EGFR/EGFRvIII-overexpressing target cells in vitro. In each case, the IL agent was significantly more cytotoxic than the corresponding nontargeted liposomal drug in target cells, whereas it was equivalent in cells lacking EGFR/EGFRvIII overexpression. We conclude that EGFR-targeted ILs provide efficient and targeted delivery of anticancer drugs in cells overexpressing EGFR or EGFRvIII.