This study describes the development of fusogenic liposomes as a drug delivery system for the hydrophobic antimicrobial peptide micrococcin P1 (MP1). The liposomes were formulated using phospholipids with varying acyl chain lengths, with the goal of improving biofilm eradication. Entrapment of MP1 in liposomes effectively improved its stability in solution, as demonstrated by liquid chromatography-mass spectrometry monitoring over a two-month period. Liposomal entrapment lowered the minimum inhibitory concentration of MP1 against several Staphylococcus aureus strains, including clinical isolates, by 4- to 16-folds. Increasing the phospholipid acyl chain length (16-carbon to 20-carbon) in the liposomal composition, resulted not only in an improved entrapment of MP1, but also higher antibiofilm activity. Confocal laser scanning microscopy imaging revealed that the MP1-loaded liposomal effect was likely due to disruption of the biofilm matrix. At a concentration of 0.25 µg/mL, MP1 loaded in 1,2-diarachidoyl-sn‑glycero-3-phosphocholine (DAPC)-based fusogenic liposomes reduced biofilm cell viability by approximately 55 %, compared to only 15 % with free MP1 equivalents. However, the increased liposomal bilayer hydrophobicity via the longer acyl chains compromised the physical stability of the fusogenic liposomes. While MP1-loaded liposomes based on the shorter 16-carbon acyl chain 1,2-dipalmitoyl-sn‑glycero-3-phosphocholine (DPPC) remained stable for two months, the DAPC liposomes were only stable for two weeks. The physical stability was improved by increasing the concentration of the cationic phospholipid, 1,2-dioleoyl-3-trimethylammonium-propane (DOTAP), from 25 mol % to 50 mol % in the liposomal composition. Overall, these findings highlight the potential of liposomal systems for delivering hydrophobic peptides like MP1 to Staphylococcus aureus biofilms, offering promise for improving the treatment of biofilm-associated infections.