Theranostic liposomes represent a paradigm shift in precision nanomedicine by integrating therapeutic drug delivery with diagnostic imaging functionality into a single nanocarrier platform. These dual-function systems address long-standing limitations of conventional therapeutics and diagnostics by enabling simultaneous treatment and real-time monitoring of drug biodistribution, tissue accumulation, and therapeutic response. Structurally composed of phospholipid bilayers, liposomes can encapsulate diverse therapeutic agents—from small-molecule chemotherapeutics to macromolecules like proteins and nucleic acids—while co-loading imaging probes including fluorescent dyes, magnetic resonance imaging (MRI) contrast agents, computed tomography (CT) enhancers, and radionuclides for positron emission tomography (PET) or single-photon emission computed tomography (SPECT). Through rational design strategies including size optimization, PEGylation for prolonged circulation, ligand-mediated active targeting, and incorporation of stimuli-responsive lipids, theranostic liposomes achieve enhanced pharmacokinetics, selective tumor or tissue accumulation, and controlled release kinetics. Pharmacokinetically, these systems exploit the enhanced permeability and retention (EPR) effect for passive targeting and receptor-mediated endocytosis for active targeting, while multimodal imaging enables quantitative assessment of drug localization and therapeutic efficacy. Clinical applications span oncology, cardiovascular disease, neurological disorders, and infectious diseases—with theranostic platforms enabling personalized dosing adjustments, early prediction of therapeutic outcomes, and reduction of off-target toxicity. Despite remarkable potential, challenges including formulation stability, batch-to-batch reproducibility, cost-effective scale-up, and complex regulatory requirements demand continued innovation. Future developments emphasize smart, stimuli-responsive systems, artificial intelligence-driven optimization, biodegradable hybrid architectures, and personalized liposomal engineering. Collectively, theranostic liposomes embody the convergence of materials science, molecular pharmacology, and imaging technology—redefining precision medicine by seamlessly integrating diagnosis, therapy, and real-time disease monitoring into adaptive, patient-centric treatment paradigms.