Due to the adverse effects associated with long-term administration of antifungal drugs used for treating dermatophytic lesions like tinea unguium, there is a critical need for novel antifungal therapies that exhibit improved absorption and minimal adverse effects. Nanoformulations offer a promising solution in this regard. Topical formulations may penetrate the upper layers of the skin, such as the stratum corneum, and release an appropriate amount of drugs in therapeutic quantities. Liposomes, particularly nanosized ones, used as topical medication delivery systems for the skin, may have various roles depending on their size, lipid and cholesterol content, ingredient percentage, lamellarity, and surface charge. Liposomes can enhance permeability through the stratum corneum, minimize systemic effects due to their localizing properties, and overcome various challenges in cutaneous drug delivery. Antifungal medications encapsulated in liposomes, including fluconazole, ketoconazole, croconazole, econazole, terbinafine hydrochloride, tolnaftate, and miconazole, have demonstrated improved skin penetration and localization. This review discusses the traditional treatment of dermatophytes and liposomal formulations. Additionally, promising liposomal formulations that may soon be available in the market are introduced. The objective of this review is to provide a comprehensive understanding of dermatophyte infections and the role of liposomes in enhancing treatment.