The clinical usage of docetaxel (DTX) is severely hindered by the dose-limiting neutropenia and peripheral neurotoxicity of polysorbate 80-solubilized DTX injection, and there are no alternative formulations until now. In this study, we developed a new liposomal formulation of DTX to reduce its toxicities, accompanying with the greatly improved antitumor activity. The DTX was encapsulated into liposomes in the form of hydrophilic glutathione (GSH)-conjugated prodrugs using a click drug loading method, which achieved a high encapsulation efficiency (∼95 %) and loading capacity (∼30 % wt). The resulting liposomal DTX-GSH provided a sustained and efficient DTX release (∼50 % within 48 h) in plasma, resulting in a greatly improved antitumor activities as compared with that of polysorbate 80-solubilized DTX injection in the subcutaneous and orthotopic 4 T1 breast tumor bearing mice. Even large tumors > 500 mm3 could be effectively inhibited and shrunk after the administration of liposomal DTX-GSH. More importantly, the liposomal DTX-GSH significantly decreased the neutropenia and peripheral neurotoxicity as compared with that of polysorbate 80-solubilized DTX injection at the equivalent dose. These data suggested that the liposomal DTX-GSH might become a superior alternative formulation to the commercial DTX injection.