The hair follicle, hair shaft and sebaceous gland are collectively known as the pilosebaceous unit. The pilosebaceous unit is a complex, dynamic, 3-D structure, which is the site of unique biochemical, metabolical and immunological events. Ongoing research has focused on the hair follicle as a potential route for both localized and systemic drug delivery. Targeted drug delivery to the specific sites of hair follicle has paved ways to treat several dermatological abnormalities that are known to originate at the hair follicle. In recent studies, topical liposomes have been shown to target the drug to the pilosebaceous unit. This review describes general aspects of pilosebaceous unit, follicular delivery, with particular emphasis on studies which have demonstrated targeted follicular delivery via liposomes.