Thermosensitive liposomes with self assembled gold nanostructures have been developed for photo-thermal therapy. These liposomes (DSPC: CH: POPG, w/w ratio 721) have been prepared by thin film hydration and incorporated with gold nanostructures in two different ways. In one of the types, the liposomes were synthesized to encapsulate near infrared (NIR) absorbing gold nanocages within them. In another type, gold nanoclusters were self assembled on to the surface of these preformed liposomes. Among the two systems, the gold cluster coated liposome was chosen for further analysis owing to its better degradability criteria. It was found that the presence of a liposome template helps in tuning the absorbance of gold nanoclusters to NIR wavelength. NIR laser mediated temperature rise experiments were performed and the photothermal efficiency of these gold-coated liposomes was compared with gold nanoshells. It was found that gold - cluster self assembled liposomes were equally efficient as gold nanoshells in photo-thermal conversion. In addition, they have the capacity to act as carriers for drugs for targeted drug delivery. Gold nanocluster self-assembled thermosensitive liposomes are biocompatible and have tremendous potential in killing cancer cells by dual modes of photo-thermal effect and temperature triggered drug delivery. © 2012 IEEE.