This study aimed to evaluate the effects of incorporating liposome-encapsulated nisin Z, nisin Z producing Lactococcus lactis ssp. lactis biovar. diacetylactis UL719, or Lactobacillus casei-casei L2A adjunct culture into cheese milk on textural, physicochemical and sensory attributes during ripening of Cheddar cheese. For this purpose, cheeses were made using a selected nisin tolerant cheese starter culture. Proteolysis, free fatty acid production, rheological parameters and hydrophilic/hydrophobic peptides evolution were monitored over 6 mo ripening. Sensory quality of cheeses was evaluated after 6 mo. Incorporating the nisin-producing strain into cheese starter culture increased proteolysis and lipolysis but did not significantly affect cheese rheology. Liposome-encapsulated nisin did not appear to affect cheese proteolysis, rheology and sensory characteristics. The nisinogenic strain increased the formation of both hydrophilic and hydrophobic peptides present in the cheese water extract. Sensory assessment indicated that acidic and bitter tastes were enhanced in the nisinogenic strain-containing cheese compared to control cheese. Incorporating Lb. casei and the nisinogenic culture into cheese produced a debittering effect and improved cheese flavor quality. Cheeses with added Lb. casei and liposome-encapsulated nisin Z exhibited the highest flavor intensity and were ranked first for sensory characteristics.