The drug release from Liposomes depends on many factors including the composition of Liposomes, the type of drug encapsulated and nature of the cell. Once it is released a drug that normally crosses the membrane of a cell will enter the cell, other drugs will not enter. Doxorubicin is a drug with narrow therapeutic index and short biological half-life. This study aimed at developing and optimizing liposomal formulation of Doxorubicin in order to improve its bioavailability. In evaluation study the effect of the varying composition of lipids on the properties such as encapsulation efficiency, particle size and drug release were studied. Phase transition study was carried out to confirm the complete interaction of Doxorubicin with bilayer structure of liposome. Moreover, the release of the drug was also modified and extended over a period of 8 h in all formulations. F2 emerged as the most satisfactory formulation in so far as its properties were concerned. Further, release of the drug from the most satisfactory formulation (F2) was evaluated through dialysis membrane to get the idea of drug release.