Psoriasis, recognized as a chronic inflammatory skin disorder, disrupts immune system functionality. Global estimates by the World Psoriasis Day consortium indicate its impact on approximately 130 million people, constituting 4 to 5 percent of the worldwide population. Conventional drug delivery systems, mainly designed to alleviate psoriasis symptoms, fall short in achieving targeted action and optimal bioavailability due to inherent challenges such as the drug's brief half-life, instability, and a deficiency in ensuring both safety and efficacy. Liposomes, employed in drug delivery systems, emerge as highly promising carriers for augmenting the therapeutic efficacy of topically applied drugs. These small unilamellar vesicles demonstrate enhanced penetration capabilities, facilitating drug delivery through the stratum corneum layer of skin. This comprehensive review article illuminates diverse facets of liposomes as a promising drug delivery system to treat psoriasis. Addressing various aspects such as formulation strategies, encapsulation techniques, and targeted delivery, the review underscores the potential of liposomes in enhancing the efficacy and specificity of psoriasis treatments.