Combining localized heating with thermosensitive liposomes provides a means for triggering the rapid release of active drug in a targeted region. The objective of this research was to demonstrate the feasibility of using MRI-controlled focused ultrasound hyperthermia in rabbit VX2 tumors and bone to achieve thermally-mediated localized drug delivery. To generate a uniform region of mild heating, a focused ultrasound transducer was mechanically scanned in a circular trajectory by an MRI-compatible positioner. MRI temperature images were continuously acquired during scanned heating, and applied power was adjusted in a multi-point feedbackcontrol loop based on temperatures measured in tumors or in soft tissue adjacent to bone. Lysothermosensitive liposomal doxorubicin was infused intravenously during hyperthermia. Two hours post-treatment, unabsorbed liposomes were flushed from the vasculature with saline. Drug concentrations in homogenized tissues sampled from heated and unheated regions were measured by doxorubicin fluorescence. MRI-controlled focused ultrasound achieved stable heating at 43°C for 20 minutes in VX2 tumors implanted in the thighs of 5 rabbits, and at the muscle-bone interface of 9 rabbits. Localized heating resulted in a 20-fold increase in doxorubicin concentration localized to heated tumors, with 8 and 17-fold increases in bone marrow and muscle adjacent to the heated bone interface.