Entrapping inclusion complexes in liposomes has been proposed to increase the entrapment efficiency (EE) and stability of liposomes compared with conventional liposomes. In the present study, a stable honokiol-in-hydroxypropyl-β-cyclodextrin-in-liposome (honokiol-in-HP-β-CD-in-liposome) was developed as honokiol delivery system by a novel method. The final molar ratio of honokiol/HP-β-CD/lipid was selected as 1:2:2. The mean particle size was 123.5 nm, the zeta potential was -25.6 mV, and the EE was 91.09 ± 2.76%. The release profile in vitro demonstrated that honokiol is released from honokiol-in-HP-β-CD-in-liposome with a sustained and slow speed. Crystallographic study indicated that honokiol was first bound within HP-β-CD and then the inclusion complex was encapsulated within liposomes. Honokiol-in-HP-β-CD-in-liposome without freeze dry kept stable for at least 6 months at 4°C. Pharmacokinetic study revealed that honokiol-in-HP-β-CD-in-liposome significantly retarded the elimination and prolonged the residence time in circulating system. The data of bioactivity showed that honokiol-in-HP-β-CD-in-liposome remained similar antiproliferative activity in A549 and HepG2 tumor cells compared to free honokiol. These results suggested that we had successfully prepared honokiol-in-HP-β-CD-in-liposome. The novel honokiol formulation was easy to push industrialization forward and might be a potential carrier for honokiol delivery in tumor chemotherapy. Copyright © 2011 Wiley-Liss, Inc.