The TNF-related apoptosis-inducing ligand (TRAIL) is a powerful inducer of apoptosis in tumor cells; however, clinical studies with recombinant soluble TRAIL were rather disappointing. Here, we developed TRAIL-functionalized liposomes (LipoTRAIL, LT) to mimic membrane-displayed TRAIL for efficient activation of death receptors DR4 and DR5 and enhanced induction of apoptosis, which were combined with an anti-EGFR single-chain Fv fragment (scFv) for targeted delivery to EGFR-positive tumor cells. These immuno-LipoTRAILs (ILTs) bound specifically to EGFR-expressing cells (Colo205) and exhibited increased cytotoxicity compared with that of nontargeted LTs. Compared to that of the soluble TRAIL, the plasma half-life of the functionalized liposomes was strongly extended, and increased antitumor activity of LT and ILT was demonstrated in a xenograft tumor model. Thus, we established a multifunctional liposomal TRAIL formulation (ILT) with improved pharmacokinetic and pharmacodynamic behavior, characterized by targeted delivery and increased induction of apoptosis due to multivalent TRAIL presentation.