Most clinically approved cancer therapies are potent and toxic small molecules that are limited by severe off-target toxicities and poor tumor-specific localization. Over the past few decades, attempts have been made to load chemotherapies into liposomes, which act to deliver the therapeutic agent directly to the tumor. Although liposomal encapsulation has been shown to decrease toxicity in human patients, reliance on passive targeting via the enhanced permeability and retention (EPR) effect has left some of these issues unresolved. Recently, investigations into modifying the surface of liposomes via covalent and/or electrostatic functionalization have offered mechanisms for tumor homing and subsequently controlled chemotherapeutic delivery. A wide variety of biomolecules can be utilized to functionalize liposomes such as proteins, carbohydrates, and nucleic acids, which enable multiple directions for cancer cell localization. Importantly, when nanoparticles are modified with such molecules, care must be taken as not to inactivate or denature the ligand. Peptides, which are small proteins with <30 amino acids, have demonstrated the exceptional ability to act as ligands for transmembrane protein receptors overexpressed in many tumor phenotypes. Exploring this strategy offers a method in tumor targeting for cancers such as glioblastoma multiforme, pancreatic, lung, and breast based on the manifold of receptors overexpressed on various tumor cell populations. In this review, we offer a comprehensive summary of peptide-functionalized liposomes for receptor-targeted cancer therapy.