The number of studies conducted with liposomes to reduce side effects in systemic administration of chemotherapeutic agents is increasing day by day. One of these chemotherapeutic agents, 5-Fluorouracil (5-FU) is a good candidate for encapsulating into the liposomes; however, it has been difficult to obtain liposomal 5-FU with high encapsulation efficiency. The various factors such as preparation method (thin film hydration method and passive loading with small volume incubation method), drug amount (10 mg, 7.5 mg, and 5 mg), hydration volume (3.5 mL and 2 ml), and incubation volume (2 mL and 1 mL) were investigated to optimize the formulation of 5-FU encapsulated liposomes. Liposomes were characterized according to particle size, polydispersity index (PDI), zeta potential, and encapsulation efficiency (EE%). The in vitro release study was carried out using Franz diffusion cell. Based on the optimization of formulation, the average drug EE% and the mean particle size of 5-FU-loaded liposomes were found to be 25% and 188.6 nm. In vitro drug release of 5-FU-loaded liposomes (SVI-4) presented a biphasic release of 5-FU, and this behavior was in accordance with the first-order equation. According to the results, 5-FU can be effectively loaded into liposomes prepared by passive loading with small volume incubation method.