For some time we have been developing novel enzyme-triggered prodrugs for drug delivery targeting cancer. The liposomal prodrugs take advantage of the EPR effect to localize to tumors and of the local over-expression of secretory phospholipase A2 in tumors. Compared to conventional liposomal drug delivery systems, our prodrug-lipid conjugates have two main advantages: 1) the drugs are covalently linked to the lipids and thus leakage is circumvented and 2) the lipophilic bilayer of the formulated liposomes effectively shields the drugs from the aqueous environment in vivo. Consequently, the strategy accommodates therapeutic agents with otherwise unfavorable pharmacokinetic properties. We have designed and synthesized different prodrugs, including published examples using capsaicin, chlorambucil and all-trans retinoic acid as the cytotoxic agents. Currently, we are investigating more potent agents targeting nuclear receptors and structural proteins. The presentation will highlight various strategies and recent progress towards improved systems, including chemical synthesis, enzyme activity and cytotoxicity.