Despite the advantages of direct intratumoral (IT) injection, the relatively rapid withdrawal of most anti-cancer drugs from the tumor due to their small molecular size limits the effectiveness of this method of administration. To address these limitations, recently, increasing attention has been directed to using slow-release biodegradable delivery systems for IT injection. This study aimed to develop and characterize a doxorubicin-loaded DepoFoam system as an efficient controlled-release carrier to be employed for locoregional drug delivery in cancer treatment. Major formulation parameters, including the molar ratio of cholesterol to the main lipid [Chol/egg phosphatidylcholine (EPC)], triolein (TO) content, and lipid-to-drug molar ratio (L/D), were optimized using a two-level factorial design approach. The prepared batches were evaluated for encapsulation efficiency (EE) and percentage of drug release (DR) after 6 and 72 hours as dependent variables. The optimum formulation (named DepoDOX) was further evaluated in terms of particle size, morphology, zeta potential, stability, Fourier-transform infrared spectroscopy, in vitro cytotoxicity, and hemolysis. The analysis of factorial design indicated that TO content and L/D ratio had a negative effect on EE; between these two, TO content had the greatest effect. The TO content was also the most significant component, with a negative effect on the release rate. The ratio of Chol/EPC showed a dual effect on the DR rate. Using a higher percentage of Chol slowed down the initial release phase of the drug; nevertheless, it accelerated the DR rate in the later slow phase. DepoDOX were spherical and honeycomb-like structures (≈ 9.81 μm) with a desired sustained release profile, as DR lasted 11 days. Its biocompatibility was confirmed by the results of cytotoxicity and hemolysis assays. The in vitro characterization of optimized DepoFoam formulation demonstrated its suitability for direct locoregional delivery. DepoDOX, as a biocompatible lipid-based formulation, showed appropriate particle size, high capability for encapsulating doxorubicin, superior physical stability, and a markedly prolonged DR rate. Therefore, this formulation could be considered a promising candidate for locoregional drug delivery in cancer treatment.