The purpose of this study was to prepare transferrin (Tf) targeted liposomal 5-Fluorouracil (5FU) to improve the safety and efficacy of the drug. Liposomes were prepared using thin layer method. Morphology of liposomes was characterized by transmission electron microscopy (TEM) and their particle size was also determined. The in vitro cytotoxicity was investigated via MTT assay on HT-29 (as cancer cell) and fibroblast (as normal cell). Moreover, cytotoxicity mechanism of targeted liposomes was determined through the production of reactive oxygen species (ROS), mitochondrial membrane potential (ΔΨm) and release of cytochrome c. Results showed that encapsulation efficiency (EE%) was 58.66 ± 0.58 and average size of liposomes was 107 nm. Also, nano-particles were spherical as shown by TEM. MTT assay on HT-29 cells revealed the higher cytotoxic activity of targeted liposomes in comparison to free drug and non-targeted liposome. In contrast, comparing with cancer cells, targeted liposomes had no cytotoxic effect on normal cells. In addition, targeted liposomes induced apoptosis through activation of mitochondrial apoptosis pathways, as evidenced by decreased mitochondrial membrane potential and release of cytochrome c. Results of the study indicated that targeted liposomes would provide a potential strategy to treat colon cancer by inducing apoptosis via mitochondria signaling pathway with reducing dose of the drug and resulting fewer side-effects.