The first Nano medication to be approved for clinical usage was liposomes. Liposomes are being utilized more frequently for targeted drug delivery because of their incredible capacity to prevent drug deterioration and minimize unwanted side effects. In Liposomes, the drug can either be integrated inside the aqueous space (hydrophilic drugs) or inside the phospholipid's bilayer (hydrophobic drugs). The classification of liposomes, production of liposomes, applications, their advantages and drawbacks are the main topics covered in this review. Today, most researchers are becoming more and more interested in liposomes. As they are effective against a certain condition, and are simple to make, and have several additional benefits than others. This review covered liposomes as a modified dosage form, covering their present status, drawbacks, and applications. Numerous liposome-based formulations with higher drug concentrations have been developed as liposomes are effective as therapeutic agents.