Gemcitabine (GEM) is a nucleoside analogue approved as a first line of therapy for pancreatic ductal adenocarcinoma (PDAC). However, rapid metabolism by plasma cytidine deaminase leading to the short half-life, intricate intracellular metabolism, ineffective cell uptake, and swift development of chemoresistance downgrades the clinical efficacy of GEM. ONC201 is a small molecule that inhibits the Akt and ERK pathways and upregulates the TNF-related apoptosis-inducing ligand (TRAIL), which leads to the reversal of both intrinsic and acquired GEM resistance in PDAC treatment. Moreover, the pancreatic cancer cells that were able to bypass apoptosis after treatment of ONC201 get arrested in the G1-phase, which makes them highly sensitive to GEM. To enhance the in vivo stability of GEM, we first synthesized a disulfide bond containing stearate conjugated GEM (lipid− GEM), which makes it sensitive to the redox tumor microenvironment (TME) comprising high glutathione levels. In addition, with the help of colipids 1,2-dioleoyl-glycero-3-phosphocholine (DOPC), cholesterol, and 1,2-distearoyl-glycero-3-phosphoethanolamine-poly(ethylene glycol)-2000 (DSPE-PEG 2000), we were able to synthesize the lipid−GEM conjugate and ONC201 releasing liposomes. A cumulative drug release study confirmed that both ONC201 and GEM showed sustained release from the formulation. Since MUC1 is highly expressed in 70−90% PDAC, we conjugated a MUC1 binding peptide in the liposomes which showed higher cytotoxicity, apoptosis, and cellular internalization by MIA PaCa-2 cells. A biodistribution study further confirmed that the systemic delivery of the liposomes through the tail vein resulted in a higher accumulation of drugs in orthotopic PDAC tumors in NSG mice. The IHC of the excised tumor grafts further confirmed the higher apoptosis and lower metastasis and cell proliferation. Thus, our MUC1 targeting binary drug-releasing liposomal formulation showed higher drug payload, enhanced plasma stability, and accumulation of drugs in the pancreatic orthotopic tumor and thus is a promising therapeutic alternative for the treatment of PDAC.