The purpose is to design and evaluate the liposomal formulations to overcome disadvantages such as short half-life, prone to oxidation and hydrolysis, leakage and fusion in vitro. Liposomes are prepared using different techniques like lipid hydration and extrusion, reverse phase evaporation, ethanol injection, sonication, ethanol destabilization and mannitol freeze thaw methods. The formulations made using each of these methods were evaluated based on particle size and encapsulation efficiency. The particle size was measured using Dynamic light scattering and the encapsulation efficiency was measured using fluorescence spectroscopy. Finally, the suitable formulations were tested for dye release studies using SOT AX dissolution apparatus. We have determined the advantages and disadvantages of each method using for preparation of liposomes. The formulations were selected which had an optimum particle size between 100- 200 nm and the best encapsulation efficiency was around 50-70%. The dye release studies showed a release between 25-38 days. We have developed a hybrid method for preparation of liposomes by combining lipid hydration and extrusion, sonication and mannitol freeze thaw method. The advantages from each method helped us to overcome the disadvantages of short shelf life, fusion and leakage.