Targeted delivery systems for anticancer drugs are urgently needed to achieve maximum therapeutic efficacy by site-specific accumulation and thereby minimizing adverse effects resulting from systemic distribution of many potent anticancer drugs. We have prepared folate receptor targeted magnetic liposomes loaded with doxorubicin, which are designed for tumor targeting through a combination of magnetic and biological targeting. Furthermore, these liposomes are designed for hyperthermia-induced drug release to be mediated by an alternating magnetic field and to be traceable by magnetic resonance imaging (MRI). Here, detailed preparation and relevant characterization techniques of targeted magnetic liposomes encapsulating doxorubicin are described.