Nanoscale drug delivery systems using liposomes and nanoparticles are emerging technologies for the rational delivery of chemotherapeutic drugs in the treatment of cancer. Their use offers improved pharmacokinetic properties, controlled and sustained release of drugs and, more importantly, lower systemic toxicity. The commercial availability of liposomal Doxil ® and albumin-nanoparticle-based Abraxane ® has focused attention on this innovative and exciting field. Recent advances in liposome technology offer better treatment of multidrug-resistant cancers and lower cardiotoxicity. Nanoparticles offer increased precision in chemotherapeutic targeting of prostate cancer and new avenues for the treatment of breast cancer. Here we review current knowledge on the two technologies and their potential applications to cancer treatment.