A promising strategy to improve the therapeutic efficiency of antimicrobial agents is targeted therapy. Although vancomycin has been considered a gold standard for the therapy of MRSA pneumonia, clinical failure rates have also been reported owing to its slow, time-dependent bactericidal activity, variable lung tissue penetration and poor intracellular penetration into macrophages. Liposomal encapsulation has been established as an alternative for antimicrobial delivery to infected tissue macrophages and offers enhanced pharmacodynamics, pharmacokinetics and decreased toxicity compared to standard preparations. The aim of the present work is to prepare vancomycin in two different liposomal formulations, conventional and PEGylated liposomes using different methods. The prepared formulations were optimized for their particle size, encapsulation efficiency and physical stability. The dehydration-rehydration was found to be the best preparation method. Both the conventional and PEGylated liposomal formulations were successfully formulated with a narrow particle size and size distribution and % encapsulation efficiency of 9 ± 2 and 12 ± 3, respectively. Both the formulations were stable at 4°C for 3 months. These formulations were successfully used to evaluate for their intracellular killing of MRSA and in vivo pharmacokinetic and bio-distribution studies.