Anticancer drugs are generally plagued by toxic manifestations at doses necessary for control of various forms of cancer. Incorporating such drugs into liposomes not only reduces toxicity but also enhances the therapeutic index. Some antioxidants and potent immunomodulators have also been shown to impart significant antitumor activity presumably by nonspecific activation of the host immune system. In the present study, we evaluated augmentation of the antitumor activity of etoposide (ETP) by the immunomodulator tuftsin in Swiss albino mice with fibrosarcoma. The efficacies of the free form of ETP, liposomized ETP (Lip-ETP), and tuftsin-bearing liposomized ETP (Tuft-Lip-ETP) formulations were evaluated on the basis of tumor regression, effect on expression level of p53wt and p53mut, and survival of the treated animals. Tuft-Lip-ETP, when administered at a dosage of 10 mg/kg body weight/day for five days, significantly reduced tumor volume, delayed tumor growth, and also up-regulated the expression of p53wt. In contrast, although Lip-ETP delayed tumor growth, it did not decrease tumor size. The results of the present study suggest that tuftsin incorporation in drug-loaded liposomes is a promising treatment strategy for various forms of cancers, including fibrosarcoma.