Drug resistance is a major cause of treatment failure in cancer chemotherapy, including that with the extensively prescribed antimetabolite, 5-fluorouracil (5-FU). In this study, we tried to reverse 5-FU resistance by using a double-punch strategy: combining 5-FU with a biochemical modulator to improve its tumoural activation and encapsulating both these agents in one same stealth liposome. Experiments carried out in the highly resistant, canonical SW620 human colorectal model showed a up to 80% sensitisation to 5-FU when these cells were treated with our liposomal formulation. Results with this formulation demonstrated 30% higher tumoural drug uptake, better activation with increased active metabolites including critical-5-fluoro-2-deoxyuridine-5-monophosphate, superior inhibition (98%) of tumour thymidylate synthase, and subsequently, higher induction of both early and late apoptosis. Drug monitoring showed that higher and sustained exposure was achieved in rats treated with liposomal formulation. When examined in a xenograft animal model, our dual-agent liposomal formulation caused a 74% reduction in tumour size with a mean doubling in survival time, whereas standard 5-FU failed to exhibit significant antiproliferative activity as well as to increase the lifespan of tumour-bearing mice. Taken collectively, our data suggest that resistance to 5-FU can be overcome through a better control of its intratumoural activation and the use of an encapsulated formulation.