This study examines the antitumor potential of curcumin and C6 ceramide (C6) against osteosarcoma (OS) cell lines when both are encapsulated in the bilayer of liposomal nanoparticles. Three liposomal formulations were prepared: curcumin liposomes, C6 liposomes and C6-curcumin liposomes. Curcumin in combination with C6 showed 1.5 times enhanced cytotoxic effect in the case of MG-63 and KHOS OS cell lines, in comparison with curcumin liposomes alone. Importantly, C6-curcumin liposomes were found to be less toxic on untransformed primary human cells (human mesenchymal stem cells) in comparison to OS cell lines. In addition, cell cycle assays on a KHOS cell line after treatment revealed that curcumin only liposomes induced G2/M arrest by upregulation of cyclin B1, while C6 only liposomes induced G1 arrest by downregulation of cyclin D1. C6-curcumin liposomes induced G2/M arrest and showed a combined effect in the expression levels of cyclin D1 and cyclin B1. The efficiency of the preparations was tested in vivo using a human osteosarcoma xenograft assay. Using pegylated liposomes to increase the plasma half-life and tagging with folate (FA) for targeted delivery in vivo, a significant reduction in tumor size was observed with C6-curcumin-FA liposomes. The encapsulation of two water insoluble drugs, curcumin and C6, in the lipid bilayer of liposomes enhances the cytotoxic effect and validates the potential of combined drug therapy.