A liposome is one of the most commonly used encapsulation technology with proven benefits, including high biocompatibility and improved solubility, but efficacy may be compromised when used for oral delivery, including application in food. The latter is an unfortunate but manageable setback compared to its promising compatibility with various nutraceuticals regardless of their solubility, which would be greatly useful in functional food production. Oral delivery presents several challenges, specifically the harsh environment in the gastrointestinal tract with enzymatic activities and pH changes and limited permeability of compounds across intestinal epithelia. To overcome these challenges, various efforts have been made to modify and strengthen liposomes as oral carriers. In this review, a brief introduction to liposomes and the challenges faced in the gastrointestinal tract is provided. A review of the existing modification efforts done to liposomes was to increase their stability and permeability for oral delivery.