Amphotericin B microsphere formulations with and without addition of polyethylene glycol 2000 in crosslinked bovine serum albumin were prepared. Amphotericin B microspheres were characterized for particle size (<5 mu m), zeta potential (similar to 30 mV) and drug interaction by DSC and FTIR and were found to be stable formulations. Drug release profiles for these microspheres revealed that the release was primarily by diffusion. In vitro toxicity as assessed by release of haemoglobin and potassium demonstrated no toxic effect as compared with conventional solution formulation. Antifungal activity in vitro was comparable to solution formulation when tested by broth dilution method.