Photothermal therapy (PTT) is emerging as a promising treatment for skin cancer. Plasmon-resonant gold-coated liposome nanoparticles (Au Lipos NPs) specifically absorb Near Infra-Red (NIR) light resulting in localized hyperthermia (PTT). In the current study, curcumin (a hydrophobic anticancer agent) was entrapped in Au Lipos NPs as nanocrystals to act as an adjuvant for the PTT of melanoma. NIR light irradiation on Au Lipos Cur NPs triggered the release of curcumin nanocrystals which coalesce to form curcumin microcrystals (CMCs). An in situ "nano to micro" transition in the crystal state of curcumin was observed. This in situ transition leads to the formation of CMCs. These CMCs exhibited sustained release of curcumin for a prolonged duration (>10 days). The localized availability of curcumin aids in enhancing PTT by inhibiting the growth and mobility of cancer cells that escape PTT. In the in vitro modified scratch assay, the Au Lipos Cur NP + Laser group showed >1.5 fold enhanced therapeutic coverage when compared with the Au Lipos NP + Laser group. In vivo PTT studies performed in a B16 tumor model using Au Lipos Cur NPs showed a significant reduction of the tumor volume along with the localized release of curcumin in the tumor environment. It was observed that the localized release of curcumin enables an immediate adjuvant effect resulting in the enhancement of PTT. © 2019 The Royal Society of Chemistry.