The ongoing search for effective cancer treatments has spotlighted nanotechnology-based drug delivery systems as a means to enhance therapeutic outcomes and reduce systemic toxicity. Among these, liposomes have gained prominence for their ability to encapsulate diverse therapeutic agents and modulate drug release profiles. However, conventional liposomes face challenges such as limited stability, rapid clearance, and suboptimal tumor targeting. To address these issues, chitosan, a biocompatible, biodegradable, and mucoadhesive natural polymer, has been integrated with liposomal systems to create chitosan-based liposomes. These hybrid nanocarriers exhibit improved colloidal stability, prolonged circulation time, enhanced cellular uptake, and pH-responsive release, making them particularly suited for targeting the acidic tumor microenvironment. Chitosan-based liposomes thus combine the strengths of both components, offering improved drug delivery for chemotherapy, gene therapy, and siRNA applications. Their tunability and potential for targeted functionalization make them strong candidates for precision cancer treatment. This chapter explores the design, formulation, therapeutic applications, and current progress of chitosan-based liposomes in cancer therapy, while highlighting the challenges and future directions for clinical translation.