Background: Amphotericin B (AmB) remains a first-line therapeutic agent due to its broad-spectrum fungicidal activity and low microbial resistance. However, conventional formulations are severely restricted by dose-limiting nephrotoxicity driven by drug self-aggregation. Nanotechnology-driven drug delivery systems, particularly liposomes (L), have been widely adopted to over come these biopharmaceutical constraints. Objectives: This research aimed to formulate and optimize L-AmB using the thin-film hydration method to enhance drug stabil ity and reduce systemic toxicity, achieving high entrapment efficiency and controlled release through precise lipid-to-drug ratio modulation. Methods: L-AmB was prepared using HSPC, DSPG, and cholesterol via thin-film hydration. Preformulation studies included organoleptic evaluation, solubility analysis, melting point determination, and drug-excipient compatibility via FT-IR and DSC. The optimized formulation was characterized through standard methods. Results: The optimized formulation (Batch F4) exhibited a mean particle size of 82.4 ± 2.1 nm with a PDI of 0.142 and zeta potential of -32.5 ± 1.2 mV, indicating excellent physical stability. Entrapment efficiency reached 94.2 ± 1.5% with 92.8% yield. In vitro release studies demonstrated a sustained profile following the Higuchi model, with only 22% drug released in the first 8 hours. Stability studies confirmed refrigeration (4°C) as optimal for maintaining liposomal integrity. Conclusions: The optimized L-AmB formulation represents a safer alternative to conventional deoxycholate treatments. The sub-micron size ensures long-term stability and enhanced circulation via EPR effect. The sustained release profile minimizes the “burst effect” associated with nephrotoxicity. This study demonstrates that L-AmB offers a promising platform for improved clinical outcomes in systemic fungal infections.