Geldanamycin (GA) and its analogues inhibit heat shock protein 90 (Hsp90) and have shown significant antitumor activity in vivo; however, clinical development of GA has been hampered by its poor solubility and severe hepatotoxicity. More soluble analogues, such as 17-DMAG and 17-AAG, are easier to formulate, and have progressed through early clinical trials. However the large volume of distribution and systemic toxicity associated with these analogues may limit their distribution into tumors, thereby severely reducing efficacy and increasing non-specific toxicities. We have evaluated a formulation of a lipophilic GA prodrug, 17′GAC16Br encapsulated in methoxy-capped poly(ethylene glycol)-block-poly(ε-caprolactone) (mPEG-b-PCL) micelles, by comparing it to free 17-DMAG at 10 mg/kg in rats. mPEG-b-PCL micelles reported herein demonstrated substantial sustained release and conversion of 17′GAC16Br into 17′GAOH at significantly greater levels in all tissues analyzed compared to the free drug, allowing for a 72-fold enhancement in the AUC, a 21-fold decrease in Vd, an 11-fold decrease in CLtot, and a 2-fold and 7-fold enhancement in the overall MRT of 17′GAC16Br and 17′GAOH, respectively. Importantly, the micellar formulation exhibited lower systemic toxicity than 17-DMAG, with a MTD > 200 mg/kg and a 2000-fold enhancement in the AUC. 17′GAC16Br in micelles were poorly cleared renally, in contrast to 17-DMAG and 17′GAOH, but showed preferential accumulation and prodrug conversion in reticuloendothelial organs of normal animals. Overall, the data indicate that this nanocarrier system is a promising alternative to the current 17-DMAG formulation and offers excellent potential for further pre-clinical and clinical cancer studies. © 2008 Elsevier B.V. All rights reserved.