The current formulation of paclitaxel contains ethanol and Cremophor EL and has been reported to cause serious adverse reactions. The purpose of the present work was to develop an improved emulsion vehicle for paclitaxel and to study the physicochemical properties of such a system.Emulsions were prepared by either microfluidization or sonication method and the droplet size characterized by dynamic light scattering and light microscopy.Stable emulsions could be made using mixtures of lecithin/sodium deoxycholate as the emulsifiers. The formulation was further improved by using a combination of free acid and the sodium salt. Paclitaxel could be loaded into the emulsions at 2.5 mg/ml without the formation of drug crystals. While these emulsions were stable on storage, they flocculated when mixed with plasma. Steric stabilization of the emulsion droplets with poloxamer 188 increased the stability of the emulsions in plasma but promoted the crystallization of paclitaxel. The crystallization tendency could be reduced by using PEG5000PE (1,2-dipalmitoyl-sn-glycero-3-phosphoethanolamine-N-[poly (ethylene glycol) 5000]), a less water-soluble stabilizer.Emulsions with good stability characteristics containing 2.5 mg/ml paclitaxel could be made using bile salt/acid and lecithin, and the excellent stability of these emulsions in plasma was achieved by steric stabilization using PEG5000PE.