Currently, six liposomal chemotherapeutics have received clinical approval and many more are in clinical trials or undergoing preclinical evaluation. Liposomes exhibit low toxicity and improve the biopharmaceutical features and therapeutic index of drugs, thereby increasing efficacy and reducing side effects. In this review we discuss the advantages of using liposomes for the delivery of chemotherapeutics. Gemcitabine and paclitaxel have been chosen as examples to illustrate how the performance of a metabolically unstable or poorly water-soluble drug can be greatly improved by liposomal incorporation. We look at the beneficial effects of liposomes in a variety of solid and blood-borne tumors, including thyroid cancer, pancreatic cancer, breast cancer and multiple myeloma.