The potential use of ultradeformable and standard liposomes as skin drug delivery systems was investigated in-vitro. An improved experimental design gave a good measure for skin deposition of drug. This avoided the contamination that can occur due to incomplete washing of the donor before direct determination of the amount of drug in the skin. The design used aqueous ethanolic receptor which is believed to diffuse into skin, disrupting deposited liposomes (if any) and thus releasing both bound and free drug. The receptor fluid was refined by testing different concentrations of ethanol. The applied dose was also optimized. Using the improved design and the optimum dose, an ultradeformable formulation was compared with four traditional liposomes for skin delivery of 5-fluorouracil (5-FU). The best receptor was 50% aqueous ethanol and the optimum dose was 20 microL. The ultradeformable formulation was superior to standard liposomes in the skin delivery of 5-FU. Of the traditional liposomes, the non-rigid preparation was the best. However, stabilization of the liposome membrane with cholesterol abolished the benefit of this non-rigid preparation. It was concluded that ultradeformable vesicles are promising agents for skin delivery of drugs.