The goal of this study was to prepare cationic nanoliposomal doxorubicin in which PEG molecule attached to the liposome via a hypoxia-sensitive azo linker. The cost-effective hypoxia-sensitive molecule (HSM) was synthesized composing of C18H37 lipophilic tail, azo-linker, and PEG2000 hydrophilic molecule. The NMR and FTIR were employed to characterize the HSM. Then, this compound was post-inserted into the cationic liposome (Cat-lip), and PEG-Azo-Cat-lip was prepared and characterized using DLS. In vitro release and cytotoxicity studies were performed in normoxic and hypoxic conditions. In vivo biodistribution and anti-tumor activities of the formulations were studied on mice bearing C-26 colon carcinoma tumor model and compared with PEGylated liposomal doxorubicin (Caelyx®). Besides, the histological test confirmed the formulation biosafety on healthy mice. The results of NMR and FTIR indicated the synthesis of HSM. The decrease in the zeta-potential of formulation from +18.4 mV for Cat-lip to +6.1 mV along with the increase in the size of the PEG-Azo-Cat-lip indicated the successful post-insertion of HSM. The release study showed that PEGylation results in the more stable PEG-Azo-Cat-lip compared to the Cat-lip. The increased cytotoxicity of the PEG-Azo-Cat-lip in the hypoxic condition also indicated the cleavage of the azo-linker in the hypoxic environment. In vivo biodistribution using animal imaging has shown higher tumor accumulation of the PEG-Azo-Cat-lip than Cat-lip during the 120 h of the study. The results of anti-tumor activities and biosafety of the formulations also showed the higher efficiency of the PEG-Azo-Cat-lip compared with the Cat-lip. The results of this study, indicated the anti-tumor efficacy of this hypoxia-sensitive which merits further investigation.