Liposomes have been used therapeutically and as a local drug delivery system in the bladder. However, the exact mechanism for the uptake of liposomes by bladder cells is unclear. In the present study, we investigated the role of endocytosis in the uptake of liposomes by cultured human UROtsa cells of urothelium and rat bladder. UROtsa cells were incubated in serum-free media with liposomes containing colloidal gold particles for 2 h either at 37°C or at 4°C. Transmission Electron Microscopy (TEM) images of cells incubated at 37°C found endocytic vesicles containing gold inside the cells. In contrast, only extracellular binding was noticed in cells incubated with liposomes at 4°C. Absence of liposome internalization at 4°C indicates the need of energy dependent endocytosis as the primary mechanism of entry of liposomes into the urothelium. Flow cytometry analysis revealed that the uptake of liposomes at 37°C occurs via clathrin mediated endocytosis. Based on these observations, we propose that clathrin mediated endocytosis is the main route of entry for liposomes into the urothelial layer of the bladder and the findings here support the usefulness of liposomes in intravesical drug delivery.