Encapsulation in packaging of food ingredients is of great interest at micro and nano levels. It is a distinct process leading to the entrapping of one substance within another material. Lipid oriented encapsulation methods are currently considered as a superior choice for encapsulation of sensitive ingredients, focusing on foods and dietary supplements of hydrophobic and hydrophilic molecules along with bioactive compounds, food ingredients supplementary systems for therapeutic purpose. Liposome and nanoliposome techniques have been widely used in food industry in nutrient enrichment and supplements. It enhances the sensory attributes and shelf life of the food product and serves as an alternative to micro encapsulation. These lipid and water oriented systems have distinguished advantages and provide higher surface area in food processing, which increases product solubility, bioavailability and permits accurate targeting of the encapsulated material to a greater extent in food and nutraceutical production. This review article focuses on nanoliposome, its preparation techniques, advantages and application of nanoliposome in food and nutraceutical process.