Liposome/metal nanoparticle conjugates are found to be a promising carrier tool for effectively delivering wide variety of drugs in a targeted site and without arguing toxic side effects of existing anticancer drugs. In this scenario, the present work was performed to choose Epirubicin-HCl (EPI) as model anticancer drug to formulate citrate stabilized EPI-gold nanoparticles (EPI-GNPs). Further, the biocompatible EPI-GNPs incorporated with lipid bilayer of liposomes formulated to exhibit effective drug delivery system. The biosynthesized EPI-GNPs and its incorporation in a lipid bilayer of liposomes was confirmed by UV-visible spectrophotometer, drug encapsulation, loading capacity, pH stability and drug releasing capacity were studied. Simultaneously, drug and carrier interaction, physical nature, stability, morphological and particle size characteristics were also studied by FTIR, XRD, SEM, TEM and Zeta size analyzer. The obtained characterization data confirmed the properties of EPI-GNPs encapsulated liposomes. The in vitro cytotoxic screening of EPI-GNPs encapsulated liposomes arrest the proliferation of MCF-7 breast cancer cell lines, at 0.1 μg/ml of liposomes displayed 52% of cell death at 24 h. The EPI-GNPs encapsulated liposomes induced time and dose dependent apoptosis compared with untreated control cancer cells.