Biocompatible liposomes were used for the first time to study the deintercalation process of a prominent anticancer drug, doxorubicin (DOX), from doxorubicin-intercalated DNA (DOX-DNA complex) under controlled experimental conditions. The study revealed that anionic liposomes (DMPG liposomes) appeared to be the most effective to bring in the highest percentage of drug release while cationic liposomes (DOTAP liposomes) scored the lowest percentage of release. The drug release was primarily attributed to the electrostatic interaction between liposomes and drug molecules. Apart from this interaction, changes in the hydrophobicity of the medium upon addition of liposomes to the DNA-drug solution accompanied by lipoplex formation between DNA and liposomes were also attributed to the observed deintercalation. The CD and the time-resolved rotational relaxation studies confirmed that lipoplex formation took place between liposomes and DNA owing to electrostatic interaction. The confocal study revealed that in the postrelease period, DOX binds with liposomes. The reason behind the binding is electrostatic interaction as well as the unique bilayer structure of liposomes which helps it to act as a "hydrophobic sink" for DOX. The study overall highlighted a novel strategy for deintercalation of drug using biocompatible liposomes, as the release of the drug can be controlled over a period of time by varying the concentration and composition of the liposomes.