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Abstract Introduction Liposomal irinotecan promotes controlled sustained release of irinotecan (CPT-11), therefore, we hypothesize that the therapeutic index (quantitative measurement of the relative efficacy/safety ratio of a drug) will be higher for liposomal than non-liposomal irinotecan. Methods We compared the therapeutic indexes of liposomal and non-liposomal irinotecan in mice bearing subcutaneous patient-derived xenograft (PDX) pancreatic tumors under dosing regimens approximating the clinical setting. Following preliminary drug sensitivity/antitumor activity analyses on three PDX tumor models, one model was selected for analyses of efficacy, biomarker, toxicology, pharmacokinetics in mice receiving liposomal irinotecan (2.5, 10, 50 mg/kg/week) or non-liposomal irinotecan (10, 25, 50 mg/kg/week). The maximum tolerated dose (MTD) for each treatment was 50 mg/kg/week. Results Using the selected IM-PAN-001 model at the MTD (both treatments, 50 mg/kg/week), antitumor activity, phospho-histone gamma-H2AX protein staining in cancer cell nuclei, histological tumor regression, and plasma levels of CPT-11 and its active metabolite SN-38 after 24 h were greater with liposomal than non-liposomal irinotecan, but tumor SN-38 levels were similar. At the lowest doses assessed, antitumor activity, histological tumor regression, and jejunum and bone marrow toxicity were similar. Based on these findings, liposomal and non-liposomal irinotecan had therapeutic indexes of 20 and 5, respectively. Conclusion This non-clinical study showed a fourfold broader therapeutic index with liposomal than non-liposomal irinotecan in mice bearing IM-PAN-001 PDX pancreatic tumors, even at optimal dosing for the two drugs. These findings support the clinical benefit observed with liposomal irinotecan in patients with pancreatic cancer.