A novel lipopolymer based system was designed and characterized for cellular delivery of anti-VEGF siRNA in SKBR-3 breast tumor cell line. Polyamidoamine (PAMAM) dendrimers of low generations (G1, G2 and G3) were incorporated into polyethylene glycol (PEG)-stabilized liposomes by following the consecutive steps: (a) synthesis of the cholesterol conjugates (40% molar ratio of cholesterol to primary amines of PAMAM), (b) incorporation of the conjugates in liposome by lipid mixing and (c) microencapsulation of the siRNA using the ethanol drop method. The cholesterol conjugates of PAMAM dendrimers (G1-Chol40%, G2-Chol40% and G3-Chol40%) formed self assembly with low CMC values (<11μg/ml). Not only did G2-Chol40% show the highest lipid mixing among the cholesterol conjugates, but also, had the lowest leakage of encapsulated carboxyfluorescein tracer. Various N(amine))/L(lipid)/P(phosphate) mole ratios were investigated for siRNA condensation by ethidium bromide dye exclusion assay. The optimum N/L/P ratio of 20:33:10 was chosen for microencapsulation of anti-VEGF siRNA by ethanol drop method, showing particle size of 130nm, zeta-potential of +4mV, siRNA loading efficiency and capacity of 96% and 13wt%, and high stability against heparin sulfate (extracellular matrix). TEM shows uniform and discrete oligo- or multi-lamellar vesicular structures. The liposome incorporating G2-Chol40% was successfully internalized into SKBR-3 cells mainly through clathrin-mediated endocytosis, which was able to escape from endosomes and showed a significantly higher sequence-specific inhibition of VEGF expression and cell growth than the respective G2-Chol40%/siRNA dendriplexes. Importantly, the cytotoxicity decreased with incorporation of G2-Chol40% in the liposomes.