Recent efforts in the area of acoustic droplet vaporization with the objective of designing extravascular ultrasound contrast agents has led to the development of stabilized, lipid-encapsulated nanodroplets of the highly volatile compound decafluorobutane (DFB). We developed two methods of generating DFB droplets, the first of which involves condensing DFB gas (boiling point from -1.1 to -2 degrees C) followed by extrusion with a lipid formulation in HEPES buffer. Acoustic droplet vaporization of micrometer-sized lipid-coated droplets at diagnostic ultrasound frequencies and mechanical indices were confirmed optically. In our second formulation methodology, we demonstrate the formulation of submicrometer-sized lipid-coated nanodroplets based upon condensation of preformed microbubbles containing DFB. The droplets are routinely in the 200-300 nm range and yield microbubbles on the order of 1-5 mu m once vaporized, consistent with ideal gas law expansion predictions. The simple and effective nature of this methodology allows for the development of a variety of different formulations that can be used for imaging, drug and gene delivery, and therapy. This study is the first to our knowledge to demonstrate both a method of generating ADV agents by microbubble condensation and formulation of primarily submicrometer droplets of decafluorobutane that remain stable at physiological temperatures. Finally, activation of DFB nanodroplets is demonstrated using pressures within the FDA guidelines for diagnostic imaging, which may minimize the potential for bioeffects in humans. This methodology offers a new means of developing extravascular contrast agents for diagnostic and therapeutic applications.