CD133+ cells in glioblastoma multiforme (GBM) display glioma stem cell (GSC) properties and have been considered to be the culprit in tumor recurrence, justifying the exploration of potential therapeutic modalities targeting CD133+ cells. Such strategies require a drug-delivery vehicle, and increasingly, the unique properties of PEGylated liposomes are being exploited for this purpose. More advanced liposomal delivery studies have suggested conjugation of CD133 antibodies as a suitable method for targeting GSCs. For targeting studies, GSCs separated from U87 GBM cells using a magnetic bead separation method were challenged with liposomes encapsulating gemcitabine (GEM) conjugated with a CD133 monoclonal antibody (PEG-lipo-CD133-GEM). An in vitro study showed that conjugation of CD133 antibody significantly enhanced the cytotoxicity of GEM through endocytosis of CD133 surface markers overexpressed on GSCs. The anti-tumor effect of PEG-lipo-CD133-GEM was 15 times higher than that of free GEM, presumably reflecting the specific targeting of the CD133 surface marker by PEG-lipo-CD133-GEM and the enhanced stability and cytotoxicity through the PEGylated liposome formulation in xenograft models. Moreover, monitoring of body weight changes showed that the use of PEGylated liposomes significantly reduced the toxicity of GEM. Taken together, our studies demonstrate that PEG-lipo-CD133-GEM shows promise for the treatment of gliomas in vitro and in xenograft models.