Multidrug resistance is a major obstacle to the effective treatment of cancer. Despite vast improvements in our understanding of the mechanisms of drug resistance, relatively few significant advances have been made towards effectively circumventing it in a clinical setting. The ability to modulate multidrug resistance has been complicated by the fact that many human tumors simultaneously exhibit multiple resistance mechanisms. In order to effectively overcome multidrug resistance it will be necessary to design new strategies that combine multiple modulating agents and approaches. This review provides an overview of the major causes of multidrug resistance and summarizes many of the current approaches being taken to overcome it. We also describe how liposomal drug delivery systems can be utilized to aid in achieving these goals.