Valacyclovir is a prodrug, an esterified version of aciclovir that has greater oral bioavailability than acyclovir. It is an antiviral drug that has been used to manage and treat various herpes infections. A liposome is the most acceptable and superior carrier that can encapsulate both hydrophilic and lipophilic drugs and protect them from degradation. Valacyclovir hydrochloride liposomes were prepared by two different methods viz: ether injection and the thin-film hydration method. The liposomes obtained were evaluated for percentage yield, vesicle size, and entrapment efficiency. Since the thin-film hydration method yielded more liposomes with better vesicle size and entrapment efficiency than the ether injection method, the study continued with the formulation and evaluation of Valacyclovir hydrochloride liposomes by the thin-film hydration method. The drug encapsulation efficiency varied from 71 % to 87 %. In vitro drug release studies were carried out and formulation exhibited around 70% drug release in 3hrs.