The chemotherapeutic gemcitabine was actively and stably loaded into lipid nanoparticles through the formation of a prodrug. Gemcitabine was chemically modified to increase the lipophilicity and introduce a weak base moiety for remote loading. Several derivatives were synthesized and screened for their potential to be good liposomal drug candidates for remote loading by studying their solubility, stability, cytotoxicity, and loading efficiency. Two morpholino derivatives of GEM (22 and 23) were chosen as the preferred prodrugs for this purpose as they possessed the best loading efficiencies (100% for drug-to-lipid ratio of 0.36 w/w). This is a considerable improvement over a passive loading strategy where typical loading efficiencies are on the order of ∼10-20% for a drug-to-lipid ratio of ∼0.01. Liposomes loaded with these two prodrugs were studied in an s.c. tumor model in vivo and showed improved therapeutic effect over free GEM (∼2-fold) and saline control (8- to 10-fold). This work demonstrates how chemical modification of a known hydrophilic drug can lead to improved loading, stability, and drug delivery in vivo.