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Combination strategy involving cyclodextrin (CD) complexation and liposomal system was investigated for Paclitaxel (PTX) to improve loading. Complexation was done using 2,6-di-O-methylbetacyclodextrin (DMβCD). Sterically stabilized double loaded PEGylated liposomes (DLPLs) containing PTX and PTX-DMβCD complex were prepared by thin film hydration. Physicochemical characterization of complex and prepared DLPLs was carried out. Cytotoxic potential, hemolytic potential and pharmacokinetics of DLPLs were tested in comparison to Taxol®. Aqueous solubility of PTX increased by almost 3 × 104 folds due to complexation with DMβCD as compared to pure drug solubility. Liposomal system was found to have 162.8 ± 4.1 nm size, zeta potential of -5.6 ± 0.14 mV and 2-fold increase in drug loading to 5.8 mol % for PTX due to double loading. DLPLs had low hemolytic potential and higher cytotoxicity on SKOV3 cells with improvement in IC50 value by 4.2 folds as compared to Taxol® at 48 h. The anti-angiogenic potential of DLPLs was confirmed by 1.33 folds lesser wound recovery in SKOV3 cells compared to Taxol®. In-vivo pharmacokinetic evaluation of DLPLs in rats substantiates improvement in circulation time, higher plasma concentration and decreased clearance rate compared to Taxol®. An efficacious system with improved loading and pharmacokinetics was formulated as potential alternative for currently marketed PTX formulation.