We previously reported the development of PE38KDEL-loaded anti-HER2 poly(lactic-co-glycolic acid) (PLGA) nanoparticles that bind and internalize in HER2-overexpressing breast cancer cells, enabling potent anti-tumor activity. To overcome the problems associated with the short half-lives of this drug delivery system, we have constructed PE38KDEL-loaded anti-HER2 PEGylated liposomes (PE-HER-liposomes). PE-HER-liposomes were constructed with Fab' of recombinant humanized anti-HER2 monoclonal antibody (anti-HER2 Fab') covalently linked to PEGylated liposomes containing PE38KDEL (PE-liposomes). We attached anti-HER2 Fab' to the terminus of PEG (polyethylene glycol) on PEGylated liposomes. Incorporation of pyridylthiopropionoylamino-PEG-distearoylphosphatidylethanolamine (PDP-PEG-DSPE) into PEGylated liposomes followed by mild thiolysis of the PDP groups resulted in the formation of reactive thiol groups at the periphery of the liposomes. Efficient attachment of maleimide-derivatized anti-HER2 Fab' took place under mild conditions. The characterization of PE-HER-liposomes, such as particle size, was evaluated by dynamic light-scattering detector. The Micro BCA method was used to determine the encapsulation efficiency of PE38KDEL and the quantity of conjugated Fab'. Flow cytometry and confocal microscopy showed that PE-HER-liposomes possessed receptor-specific binding and internalization for HER2-overexpressing SK-BR3 cells. Remarkably, PE-HER-liposomes were more cytotoxic than non-targeted PE-liposomes in HER2-overexpressing breast cancer cells. In conclusion, PE-HER-liposomes could serve as a promising therapeutic candidate for the treatment of HER2-overexpressing breast cancers.