Liposomes as a drug delivery system provides a leading approach for the systemic (intravenous) administration of drugs. Several approaches to kill tumor cells specifically have been developed, but still there is dearth in their selectivity. Among all other nano-carrier systems, liposomal formulations of cytotoxic drugs have received an appreciable recommendation in the form of clinical approvals. Liposomal delivery provides the benefits of reduced toxicity and enhanced efficacy for the treatment of cancer. However, delivery of liposomes to desired cell type with its further trafficking to desired intracellular organelle is a challenging, yet a promising approach for safer cancer therapeutics. Several anatomical-physiological barriers starting from systemic to cellular to intracellular levels are required to be overcome to achieve efficient cancer therapy. This review discusses the barriers associated with the delivery of liposomes from the extracellular to intracellular compartments of a solid tumor and further summarizes the development of liposomal carrier system to overcome these barriers.