Cytotoxic drugs encapsulated into liposomes were originally designed to increase the anticancer response, while minimizing off-target adverse effects. The first liposomal chemotherapeutic drug was approved for use in humans more than 20years ago, and the first publication regarding its use in a canine cancer patient was published shortly thereafter. Regardless, no general application for liposomal cytotoxic drugs has been established in veterinary oncology till now. Due to the popularity of canines as experimental models for pharmacokinetic analyses and toxicity studies, multiple publications exist describing various liposomal drugs in healthy dogs. Also, some evidence for its use in veterinary cancer patients exists, especially in canine lymphoma, canine splenic hemangiosarcoma and feline soft tissue sarcoma, however, the results have not been overwhelming. Reasons for this may be related to inherent issues with the enhanced permeability and retention effect, the tumour phenomenon which liposomal drugs exploit. This effect seems very heterogeneously distributed in the tumour. Also, it is potentially not as ubiquitously occurring as once thought, and it may prove important to select patients for liposomal therapy on an individual, non-histology-oriented, basis. Concurrently, new developments with active-release modified liposomes in experimental models and humans will likely be relevant for veterinary patients as well, and holds the potential to improve the therapeutic response. It, however, does not resolve the other challenges that liposomal chemotherapy faces, and more work still needs to be done to determine which veterinary patients may benefit the most from liposomal chemotherapy.