Liposomes are lipid‐based nanoparticles that have been used to deliver encapsulated drugs for a variety of applications, including treatment of life‐threatening fungal infections. By understanding the effect of composition on liposome interactions with both fungal and mammalian cells, new effective antifungal liposomes can be developed. In this study, we investigated the impact of lipid saturation and cholesterol content on fungal and mammalian cell interactions with liposomes. We used three phospholipids with different saturation levels (saturated hydrogenated soy phosphatidylcholine (HSPC), mono‐unsaturated 1‐palmitoyl‐2‐oleoyl‐glycero‐3‐phosphocholine (POPC), and di‐unsaturated 1‐palmitoyl‐2‐linoleoyl‐sn‐glycero‐3‐phosphocholine (PLPC)) and cholesterol concentrations ranging from 15% to 40% (w/w) in our liposome formulations. Using flow cytometry, >80% of Candida albicans SC5314 cells were found to interact with all liposome formulations developed, while >50% of clinical isolates tested exhibited interaction with these liposomes. In contrast, POPC‐containing formulations exhibited low levels of interaction with murine fibroblasts and human umbilical vein endothelial cells (<30%), while HSPC and PLPC formulations had >50% and >80% interaction, respectively. Further, PLPC formulations caused a significant decrease in mammalian cell viability. Formulations that resulted in low levels of mammalian cell interaction, minimal cytotoxicity, and high levels of fungal cell interaction were then used to encapsulate the antifungal drug, amphotericin B. These liposomes eradicated planktonic C. albicans at drug concentrations lower than free drug, potentially due to the high levels of liposome‐C. albicans interaction. Overall, this study provides new insights into the design of liposome formulations towards the development of new antifungal therapeutics.