Azadiradione (AZD) is one of the four active components in Neem. AZD is commonly used in traditional medicine (Ayurveda) in all over the world. AZD showed potential biological activities such as anti-inflammatory, anti-cancer and anti-feedant. The aim of this study is to prepare and characterize liposomal formulation of the neem constituent AZD. The liposomal nanoform of AZD was successfully prepared and the high zeta potential (-38.13 ± 1.89) indicated the repulsion between the particles preventing the aggregation. Liposomal AZD showed an average size of 323.4 ± 9.79 and a narrow size distribution (0.594 ± 0.0331). In addition, AZD loaded liposomes had a zeta potential value of -38.13 ± 1.89. Furthermore, the encapsulation efficiency of the drug (EE %) was determined by using high performance liquid chromatography. The analysis showed that EE% was around 82.02 ± 9.01%. Additionally, the morphology of the particles was examined by scanning electron microscope. The results revealed that the nanoparticles have a roughly spherical shapes. In conclusion, the employed method produced a liposomal encapsulated form of the biologically active AZD which worse further analysis for the determination of the bioavailability and tissue distribution of AZD vs liposomal nanoparticles in vivo in order to increase the activity of AZD as anticancer potential drug. Key word: Azadiradione, Neem, liposomal formulation, scanning electron microscopy, HPLC.