Camptothecin and related analogues possess the ability to halt the growth of a wide range of animal and human tumors via a unique mechanism of action: stabilization of the binding of topoisomerase I to DNA, leading to DNA fragmentation. An important structural requirement for successful interaction with the topoisomerase I target and antitumor potency in vivo is a closed α-hydroxy lactone ring moiety, which unfortunately hydrolyzes under physiological conditions to yield the inactive carboxylate form. In this report we employ both HPLC methodologies and time-resolved fluorescence spectroscopy to demonstrate that substitution of a 7-ethyl group into the 10-hydroxycamptothecin molecule (yielding SN-38) significantly enhances drug stability in the presence of human serum albumin (HSA) by promoting preferential associations of the lactone form of the drug with the blood protein. Hydrolysis of both 10-hydroxycamptothecin and SN-38 free in solution proceeded with similar half-lives (20 and 22 min, respectively), but the stability profiles differed markedly in the presence of HSA: the half-life of SN-38 in HSA was 35 min (vs 20 min without HSA) and the percent lactone form at equilibrium was much higher (38% vs 13%). Fluorescence lifetime measurements and binding isotherm analysis revealed that unlike 10-hydroxycamptothecin and camptothecin (which preferentially bind HSA in their carboxylate form), SN-38 preferentially binds HSA in its lactone form. In summary, our results indicate that incorporation of an ethyl substituent into 10-hydroxycamptothecin at the 7 position markedly enhances drug stability in the presence of human albumin due to favorable, reversible binding between the lactone form of the drug and HSA, enabling a high percentage of SN-38 to be transported in its intact and biologically-active form. The 7-ethyl substituent also increases the drug's affinity for lipid bilayers, and together with preferential lactone binding to HSA, should promote distribution of the active form in the body, making 7-alkylated analogues logical candidates for development and evaluation.