The efficacy and toxicity of drugs depend not only on their potency but also on their ability to reach the target sites in preference to non-target sites. In this regards destabilization of delivery vehicles induced by light can be an effective strategy for enhancing drug delivery with spatial and temporal control. Herein we demonstrate that the photoinduced isomerization from closed (hydrophobic) to open isomeric form (hydrophilic) of a novel DHI encapsulated in liposome leads to potential light-controlled drug delivery vehicles. We have used steady state and picosecond resolved dynamics of a drug 8-anilino-1-naphthalenesulfonic acid ammonium salt (ANS) incorporated in liposome to monitor the efficacy of destabilization of liposome in absence and presence UVA irradiation. Steady state and picosecond resolved polarization gated spectroscopy including the well-known strategy of solvation dynamics and Förster resonance energy transfer; reveal the possible mechanism out of various phenomena involved in destabilization of liposome. We have also investigated the therapeutic efficacy of doxorubicin (DOX) delivery from liposome to cervical cancer cell line HeLa. The FACS, confocal fluorescence microscopic and MTT assay studies reveal an enhanced cellular uptake of DOX leading to significant reduction in cell viability (∼40%) of HeLa followed by photoresponsive destabilization of liposome. Our studies successfully demonstrate that these DHI encapsulated liposomes have potential application as a smart photosensitive drug delivery system. © 2017 Elsevier B.V.