Lipophilic drugs have limited solubility in phospholipid systems, hence maximum entrapment levels in liposomes are known to be low. Barbigerone (Bar), an anticancer isoflavone, is water insoluble and an effective delivery route is through encapsulation in cyclodextrins (CDs) followed by a second encapsulation in liposomes. In this study, Bar or its inclusion complex [Bar/2-hydroxypropyl-b-CD (HP-b-CD)] were incorporated into liposomes prepared by the ethanol injection method. A 4.6-fold increase of encapsulation efficiency was achieved for the liposome-Bar/ HP-b-CD complex (Bar/HP-b-CD/liposome) in comparison with the conventional Bar/liposome. The size of the Bar/HPb-CD/liposome was 87.76 ± 1.45 nm and the zeta potential was -35.02 ± 0.50 mV. In addition, the liposomes remained stable in liquid form at 4°C for at least 3 months. The Bar/HP-b-CD/liposome was evaluated for anti-cancer activity in hepatocarcinoma HepG2 and colon cancer C26 cells and showed comparable toxicity to that of plain Bar. In vivo studies in hepatic cancer xenografted nude mice model showed that Bar/HP-b-CD/liposome significantly inhibited tumor growth with a substantial increase in animal survival. In conclusion, the encapsulation of the Bar/HP-b-CD complex into liposomes could provide an alternative means for its potential use in cancer therapy.