Liposomes are artificial phospholipid vesicles, used to encapsulate and stabilize the drugs and improve their pharmacological properties. PEGylated liposomes are the liposomes modified on the surface with polyethylene glycol (PEG). This PEGylation prevents adsorption of plasma proteins to the liposome surface. This blocks the recognition and uptake of liposomes by the reticoloendothelial system (RES), thereby extending the circulation time of liposomes. PEGylated liposomes (PEGlip) aids in improving the pharmacodynamic properties of therapeutic proteins. PEGlip improves passive targeting ability on tumoral tissues by a process called enhanced permeation retention effect. It enhances the therapeutic effect of the drug and reduces the toxicity of encapsulated drug. The characteristics of PEGlip depends on the PEG linked to the surface, graft density and the distance between graft sites. PEGlyation with greater PEG chains improves the blood residence time.