Nanoscale drug delivery systems (DDS) are used to circumvent some of the non-ideal properties of conventional anticancer chemotherapy drugs. Manipulation of the physical properties of DDS provides improved control over the pharmacokinetics (PK) and pharmacodynamics (PD) of the encapsulated drugs relative to free drugs. Liposomes are the archetypical nanoscale DDS and the first of these received clinical approval in 1990. DOXIL®, liposomal doxorubicin, was the first commercially available liposomal anticancer drug (1995). It has an enhanced circulation half-life compared to the free drug because of its surface-grafted polyethylene glycol coating. DOXIL® passively targets solid tumors, and once the liposomes localize in the tumor interstitial space, the cytotoxic drug is slowly released within the tumor. Liposomes can act as sustained release delivery system and manipulation of properties such as, liposome diameter, drug release rate, bioavailability and dosing schedule can significantly impact the therapeutic outcome of the liposomal drugs. This review will focus on how alteration of these properties can impact the therapeutic efficacy and side effect profiles of DDS.