Stability testing is the primary tool used to assess expiration dating and storage conditions for pharmaceutical products. Many protocols have been used for stability testing, but most in the industry are now standardizing on the recommendations of the International Conference on Harmonization (ICH). These guidelines were developed as a cooperative effort between regulatory agencies and industry officials from Europe, Japan, and United States. Proper design, implementation, monitoring and evaluation of the studies are crucial for obtaining useful and accurate stability data. Stability studies are linked to the establishment and assurance of safety, quality and efficacy of the drug product from early phase development through the lifecycle of the drug product. Liposomes have been extensively investigated for drug delivery, drug targeting, controlled release and enhancing solubility. However the major limitation in the widespread use of this versatile drug delivery system is its instability. In present review the methods like control of the particle size, lipid composition, method of drug loading, prodrug, pro-liposomes, lyophilization and electrosteric stabilization are reviewed to enhance the physical, chemical and biological stabilities of the liposomes collectively because all are inter-related.