Background: CPX-351, a liposomal formulation of cytarabine and daunorubicin in a 5:1 molar ratio, has demonstrated pre-clinical activity against AML and ALL cell lines and is currently under phase-III investigation in adults with AML and high risk features. A phase I trial evaluating this agent in children with relapsed or refractory hematologic malignancies was conducted. Methods: Children and young adults age 12 months to 21 years with relapsed or refractory leukemia were enrolled in the dose exploration phase of the study in which participants received a single course of CPX-351. Using a rolling 6 design, CPX-351 was administered once on days 1, 3, and 5. Enrollment was initiated at the recommended dose for study in adults (dose Level 1: 100 Units/m²/dose) with provisions to explore either a single dose escalation to 134 Units/m²/dose (dose level 2) or de-escalation to 67 Units/m²/dose. Results: Nine patients [median age 8 y (range 1-17y)] with AML (n = 6) or ALL (n = 3) were enrolled and evaluable for toxicity. All participants experienced Grade 3 or 4 hematologic toxicity including 8 with fever with neutropenia or infection. Grade 3-4 non-hematologic toxicity included rash (n = 2), anorexia (n = 2), colitis (n = 1), and elevated GGT (n = 1). There were no DLTs observed in the 4 patients enrolled at level 1. Two of the 5 participants accrued at dose level 2 experienced dose limiting toxicity: Grade 3 pain lasting greater than 48 hours. One patient with AML was unevaluable due to removal from protocol therapy to receive bone marrow transplantation. All others were evaluable for response: 1 patient with ALL had stable disease, 2 with AML achieved a complete remission, and 1 with AML achieved a MRD negative marrow but developed low level CNS disease (CNS status 2). The study continues to accrue to the expansion phase using dose level 1. Conclusions: CPX-351 is well tolerated in children with relapsed leukemia and has demonstrated clinically meaningful responses. The recommended dose of CPX-351 for further study in pediatrics is 100 Units/m²/dose administered on Days 1, 3, and 5.