Recurrent pulmonary infection and inflammation are major risk factors for high morbidity and mortality in patients with cystic fibrosis (CF). As such, frequent antibiotic use and drug resistant bacterial strains are main concerns in individuals with CF. Bacterial virulence and resistance are influenced by unique CF airways fluid lining and Pseudomonas aeruginosa quorum sensing (QS) and biofilm formation. We have developed a novel liposome formulation consist of bismuth-thiol and tobramycin (LipoBiEDT-TOB) that is non-toxic and highly effective against planktonic bacteria. In this study, we examined the effect of LipoBiEDT-TOB on QS molecule N-acyl homoserine lactone (AHL) secretion by P. aeruginosa isolates in the presence of Agrobacterium tumefaciens reporter strain (A136). LipoBiEDT-TOB activity against biofilm forming P. aeruginosa was compared to free tobramycin using the Calgary Biofilm Device (CBD). Our data indicate that LipoBiEDT-TOB prevents AHL production at low tobramycin concentration (as low as 0.012 mg/l) and stops biofilm forming P. aeruginosa growth at 64 mg/l. The formulation is stable in different biological environments (biofilm, sputum, and bronchoalveolar lavage) and is able to penetrate CF sputum. Taken together, co-encapsulation of bismuth-thiol metal with tobramycin in liposome improves its antimicrobial activities in vitro.