In this study, we engineered liposomal indocyanine green (ICG) to maximize its photothermal effects while maintaining the fluorescence intensity. Various liposomal formulations of ICG were prepared by varying the lipid composition and the molar ratio between total lipid and ICG, and their photothermal characteristics were evaluated under near-infrared irradiation. We showed that the ICG dispersity in the liposomal membrane and its physical interaction with phospholipids were the main factors determining the photothermal conversion efficiency. In phototherapeutic studies, the optimized formulation of liposomal ICG showed greater anticancer effects in a mouse tumor model compared with other liposomal formulations and the free form of ICG. Furthermore, we utilized liposomal ICG to visualize the metastatic lymph node around the primary tumor under fluorescence imaging guidance and ablate the lymph node with the enhanced photothermal effect, indicating the potential for selective treatment of metastatic lymph node.