AbstractHepatocellular carcinoma (HCC) is a global health concern with high prevalence and mortality. A marine alkaloid, AP‐427, has been reported to show potential for HCC treatment. However, its use is limited by low solubility and high toxicity. We aimed to investigate the preformulation parameters and develop AP‐427 liposomes to improve its clinical suitability. A stability‐indicating HPLC assay was established, and the physicochemical properties of AP‐427 were analyzed. Afterward, AP‐427 liposomes were prepared and characterized, and their cytotoxicity was evaluated. AP‐427 had a low solubility at physiological pH, a LogD of 2.56 ± 0.03, and a basic pKa of 3.24 ± 0.12. An entrapment efficiency of 52.71 ± 3.2% was achieved after optimization. The resulting AP‐427 liposomes were 147.2 ± 3.4 nm and stable up to three months when stored in a pellet form at 4°C. The crystallization of AP‐427 in liposomes became less ordered, and AP‐427 liposomes exhibited a controlled release fitted in Korsmeyer–Peppas model, indicating the release was driven by diffusion. Furthermore, AP‐427 liposomes showed a 3.6 times reduced cytotoxicity against HepG2 cells compared with free AP‐427, potentially enhancing its antitumor efficacy. In conclusion, the precise preformulation parameters advanced the AP‐427 liposomal formulation development, which showed potential for HCC treatment.Practical Applications: The aaptamine derivative AP‐427 has shown cytotoxic effects against hepatocellular carcinoma. However, the low solubility and high toxicity limit its clinical application. The present study aims to prepare liposomal formulation to solve the current problems. Results obtained from this study shed light on challenges related to drug solubility and have paved the way for the development of an effective AP‐427 liposomal formulation with promising application in hepatocellular carcinoma therapy.