Low entrapment of drugs into liposomes is a serious challenge in their commercial application. 6-Mercaptopurine (6-MP), an antineoplastic agent, is such a drug with low entrapment efficiency (EE). We devised their lipophilic derivatization as a means of enhancing EE by covalently coupling 6-MP with glyceryl monostearate (GMS) via a succinic anhydride spacer. This prodrug had an improved partition coefficient value of 25.16 compared to 1.22 for free drug, confirming higher lipophilicity. A hydrolysis rate study of prodrug indicated 2.90%, 12.5%, 24.1%, and 25.1% hydrolysis in phosphate buffered saline (PBS) (pH 7.4) and 10%, 20%, and 30% serum, respectively. Liposomes of phosphatidylcholine (PC)/sphingomyelin, cholesterol, and dicetyl phosphate bearing drug or prodrug were prepared by shaking by hand and sonication methods. The EE was found to increase from 1.92% for free drug to 91.8% for drug-conjugate. An in vitro cell line toxicity study on L1210 leukemia cells showed improved performance of liposome-encapsulated drug-conjugate compared to free drug. The plasma drug level profile following administration of free drug and the liposomal formulation containing prodrug (HE liposome) manifested a higher sustained level of the latter, which was further improved in case of sphingomyelin-containing liposomes (STHE liposome). The pharmacokinetic parameters revealed an increase in half-life, from 61 min to 120 min for the HE liposomes and 296 min for the STHE liposomes. Therefore, increased entrapment was made possible through lipophilic derivatization, and it was subsequently tested in vivo.