Recent development in the immunochemical technique has resulted in a new ultrasensitive analytical method known as liposome immunoassay (LIA). Liposome is a key element in performing liposome immunoassays, specifically designed to participate in immune reactions. A variety of markers can be encapsulated in liposomes and used as quantitative indicators of reactions. Liposome immunoassay based on agglutination, complement-mediated lysis, cytolysin-mediated lysis, detergent-mediated lysis or destabilization of the liposomal membrane have been reviewed. The quantity of markers released from liposomes should be proportional to the concentration of the analyses. Therefore, liposomal agglutination and lysis which are essential to liposomal lysis are critically reviewed to provide a better understanding of liposome immunoassay. Based on the literature review of recent advances in liposome immunoassay for bioactive substances, this assay method may provide a convenient, specific and highly sensitive method for detecting and measuring trace amount of clinically relevant substances in the future.