Abstract: The invention provides compositions and methods for diagnosing tumors and augmentic therapeutic intervention and measuring response to cell stress using sphingomyelin containing liposomes. The liposomes can include radiotracers, contrast agents, chromophores, dyes, enzyme substrates, therapeutic agents, chemotherapeutic agents or DNA segments. The indicators enable measurement of the extent of cellular release of Acid SMase at a localized site of cell stress. The nanoparticles have the capacity to locally release their contents, be it imaging (for diagnosis) or therapeutic agents (to augment therapy).