A folate-targeted transfection complex that is internalized by certain cancer cells and displays several properties reminiscent of enveloped viruses has been developed. These liposomal vectors are comprised of a polycation-condensed DNA plasmid associated with a mixture of neutral and anionic lipids supplemented with folate-poly(ethylene glycol)-dioleylphosphatidylethanolamine for tumor cell-specific targeting. N-Citraconyl-dioleylphosphatidylethanolamine is also included for pH-dependent release of endosome-entrapped DNA into the cytoplasm, and a novel plasmid containing a 366-bp segment from SV40 DNA has been employed to facilitate transport of the plasmid into the nucleus. Because formation of the DNA core is an important step in the assembly of liposomal vectors, considerable effort was devoted to comparing the transfection efficiencies of various DNA condensing agents. It was found that complexation of plasmid DNA with high molecular weight polymers such as acylated-polylysine and cationic dendrimers leads to higher folate-mediated transfection efficiency than DNA complexed with unmodified polylysine. In contrast, compaction of plasmid DNA with small cationic molecules such as spermine, spermidine, or gramicidin S yields only weakly active folate-targeted liposomal vectors. Compared to analogous liposomal vector preparations lacking an optimally compacted DNA core, a cell-specific targeting ligand, a caged fusogenic lipid, and a nucleotide sequence that facilitates nuclear uptake, these modified liposomal vectors display greatly improved transfection efficiencies and target cell specificity.