Muscle regeneration is a vital biological process that is crucial for maintaining muscle function and integrity, particularly for the treatment of muscle diseases such as sarcopenia and muscular dystrophy. Generally, muscular tissues can self-repair and regenerate under various conditions, including acute or chronic injuries, aging, and genetic mutation. However, regeneration becomes challenging beyond a certain threshold, particularly in severe muscle injuries or progressive diseases. In recent years, liposome-based nanotechnologies have shown potential as promising therapeutic strategies for muscle regeneration. Liposomes offer an adaptable platform for targeted drug delivery due to their cell membrane-like structure and excellent biocompatibility. They can enhance drug solubility, stability, and targeted delivery while minimizing systemic side effects by different mechanisms. This review summarizes recent advancements, discusses current applications and mechanisms, and highlights challenges and future directions for possible clinical translation of liposome-based nanomaterials in the treatment of muscle diseases. It is hoped this review offers new insights into the development of liposome-enabled nanomedicine to address current limitations.