The antitumor efficacy of ursolic acid (UA) was limited by poor hydrophilicity and low bioavailability. To overcome this issue, UA was encapsulated in liposomes modified with folate conjugates for better solubility and bioavailability. This novel agent was prepared by a thin-film dispersion method and characterized by mean diameter, zeta potential, and entrapment efficiency (160.1 nm, -21.2 mV, and 88.9%, respectively). In vitro, cellular uptake efficiency, cytotoxicity, apoptosis, and cell cycle analyses were performed to show that folate-receptor (FR) positive cells endocytose more FR-targeted liposome (FTL-UA) than nontargeted PEGylated liposome (PL-UA) and that FTL-UA induced more cytotoxicity and higher apoptosis than PL-UA. Pharmacokinetic assessments showed advantages of systemic bioavailability of FTL-UA (AUC = 218.32 mg/L·h, t1/2 = 7.61 h) over free UA (AUC = 36.88 mg/L·h, t1/2 = 0.78 h). In vivo, FTL-UA showed significantly higher human epidermoid carcinoma (KB) inhibition in Balb/c nu/nu mice compared to PL-UA or free UA. The results indicate the great potential of FTL-UA against KB tumor.