Prostate cancer is the most common cancer type and the second leading cause of death from cancer in males. In most cases, no curative treatment options are available for metastatic castration-resistant prostate cancer as these tumors are highly resistant to chemotherapy. Targeted drug delivery, using liposomal drug delivery systems, is an attractive approach to enhance the efficacy of anticancer drugs and prevent side effects, thereby potentially increasing the therapeutic index. In most preclinical prostate cancer studies, passive liposomal targeting of anticancer drugs (caused by enhanced permeability and retention of the therapeutic compound) leads to an increased antitumor efficacy and decreased side effects compared to non-targeted drugs. As a result, the total effective dose of anticancer drugs can be substantially decreased. Active (ligand-mediated) liposomal targeting of tumor cells and/or tumor-associated stromal cells display beneficial effects, but only limited preclinical studies were reported. To date, clinical studies in prostate carcinoma have been performed with liposomal doxorubicin only. These studies showed that long-circulating, PEGylated, liposomal doxorubicin generally outperforms conventional short-circulating liposomal doxorubicin, stressing the importance of passive tumor targeting for this drug in prostate carcinoma. In this review, we provide an overview of the (pre)clinical studies that focus on liposomal drug delivery in prostate carcinoma.