Abstract Fluorescent liposomes are pivotal in cancer research, serving as adaptable vehicles for imaging and therapeutics. These small lipid vesicles, capable of encapsulating fluorescent dyes, offer precise visualization and monitoring of their targeted delivery to cancer cells. This review delves into the critical role fluorescent liposomes play in enhancing both cancer diagnosis and treatment. It provides an in-depth analysis of their structural features, fluorescent labeling techniques, targeting strategies, and the challenges and opportunities they present. In the domain of cancer diagnosis, the article sheds light on various imaging modalities enabled by fluorescent liposomes, including fluorescence imaging and multimodal techniques. Emphasis is placed on early detection strategies, exhibiting the utility of targeted contrast agents and biomarker recognition for enhanced diagnostic precision. Moving on to cancer treatment, the review discusses the sophisticated drug delivery mechanisms facilitated by fluorescent liposomes, focusing on chemotherapy and photodynamic therapy. Moreover, the exploration extends to targeted therapy, explaining the applications of fluorescent liposomes in gene delivery and RNA interference. In a nutshell, his article comprehensively explores the multifaceted impact of fluorescent liposomes on advancing cancer diagnosis and treatment, combining existing knowledge with emerging trends.