Nanotechnology has made significant advances in drug delivery system for the treatment of cancer. Among various nanoparticle (NP) platforms, liposomes have been most widely used as a NP drug carrier for cancer therapy. High variation in pharmacokinetics (PK) and pharmacodynamics (PD) of liposome-based therapeutics has been reported. However, the interaction of liposome-based therapeutics with the immune system, specifically the mononuclear phagocyte system (MPS), and underlying molecular mechanisms for variable responses to liposomal drugs remain poorly understood. The objective of this dissertation was to elucidate immune mechanisms for the variable responses to PEGylated liposomal doxorubicin (PLD; Doxil®), a clinically relevant NP, in animal models and in patients. In vitro, in vivo and clinical systems were investigated to evaluate the effects of chemokines (CCL2 and CCL5), heterogeneity of the tumor microenvironment, and genetic variations on PK and PD of PLD. Results showed that there was a significantly positive linear relationship between PLD exposure (AUC) and total amount of CCL2 and CCL5, most prevalent chemokines in plasma, in patients with recurrent ovarian cancer. Consistent with these findings, preclinical studies using mice bearing SKOV3 orthotopic ovarian cancer xenografts demonstrated that PLD induced the production and secretion of chemokines into plasma. In addition, in vitro studies using human monocytic THP-1 cells demonstrated that PLD altered monocyte migration towards CCL2 and CCL5. The PK and efficacy studies of PLD in murine models of breast cancer showed that heterogeneous tumor microenvironment was associated with significantly different tumor delivery and efficacy of PLD, but not small molecule doxorubicin between two breast tumor models. A candidate genetic locus that was associated with clearance of PLD in 23 inbred mouse strains contains a gene that encodes for engulfment adapter PTB domain containing 1 (Gulp1). By using integrated approaches, we were able to identify the immunological mechanisms at the molecular, tissue, and clinical levels that may contribute to inter-individual variability in PK and PD of PLD. This dissertation research has a potential to make an impact on development of future NP-based anticancer therapeutics as well as on clinical use of PLD (Doxil®) and other PEGylated liposomal anticancer agents.