Throughout the past decade, there has been a rapid growth in the development of protein/peptide-based therapeutics. These therapeutics have found widespread applications in the treatment of cancer, infectious diseases, and other metabolic disorders owing to their several desirable attributes, such as reduced toxicity, diverse biological activities, high specificity, and potency. Most protein/peptide-based drugs are still administered parenterally, and there is an unprecedented demand in the pharmaceutical industry to develop oral delivery routes to increase patient acceptability and convenience. Recent advancements in nanomedicine discoveries have led to the development of several nano and micro-particle-based oral delivery platforms for protein/peptide-based therapeutics and among these, liposomes have emerged as a prominent candidate. Liposomes are spherical vesicles composed of one or more phospholipid bilayers enclosing a core aqueous phase. Their unique amphiphilic nature enables encapsulation of a diverse range of bioactives/drugs including both hydrophobic and hydrophilic compounds for delivery. Against this backdrop, this review provides an overview of the current approaches and challenges associated with the routes and methods of oral administration of protein/peptide-based therapeutics by using liposomes as a potential vehicle. First, the conventional and innovative liposome formation approaches have been discussed along with their applications. Next, the challenges associated with current approaches for oral delivery of protein and peptide-derived therapeutics have been thoroughly addressed. Lastly, we have critically reviewed the potential of liposomes utilization as vehicles for oral delivery of proteins emphasizing the current status and future directions in this area.