As many as 48.0% of the global population suffers from disabilities caused by oral conditions. These conditions encompass dental caries, periodontal diseases, oral cancers, and other pathologies affecting the hard and soft tissues of the oral and maxillofacial regions. Topical drug treatments in the oral cavity are often ineffective due to the short contact time, which prevents the drug from reaching optimal concentrations necessary for therapeutic effect. Conventional liposomes have several limitations, including low stability, challenges in long-term storage, and rapid clearance by the reticuloendothelial system (RES). These factors significantly reduce their effectiveness in maintaining sustained drug delivery and achieving desired therapeutic outcomes. To overcome these challenges, advanced drug delivery systems have been developed. Among these systems, liposomes have been extensively explored as nanocarriers in targeted drug delivery systems, particularly in mucosal drug delivery, due to their biocompatibility and degradability, making them promising agents for the treatment of oral diseases. To address these issues, extensive research has been conducted to modify the surface of liposomes, optimizing their efficacy, and understanding their mechanisms of action. This review article discusses the role and recent advancements of liposomes in the treatment of oral diseases, highlighting their potential to revolutionize oral health care through improved drug delivery and therapeutic outcomes.