Osteosarcoma is the most common cancer in bone. Drug resistance is a challenge of current treatments that needs to be improved with novel treatment strategies. In this research, a new dual drug delivery system was developed with Gemcitabine (GEM) and Clofazimine (CLF) co-loaded liposome formulations. GEM is a well-known anticancer agent and CLF is a leprostatic and anti-inflammatory drug recently recognized as effective on cancer. GEM and CLF co-loaded liposomal formulation was achieved with compartmentalization as hydrophilic GEM being in core and lipophilic CLF sequestering in lipid-bilayer. Liposomes had high encapsulation efficiency (above 90%, GEM and above 80%, CLF). CLF release was enhanced while GEM release was slowed down in co-loaded liposomes compared to single cases. GEM/CLF co-loaded liposomes significantly enhanced cytotoxicity than GEM or CLF loaded liposomes on osteosarcoma cell line. CLF and GEM had synergistic effect (CI < 1). Results of flow cytometry showed higher apoptotic cell ratio, caspase-3 activity, mitochondrial membrane depolarized cells' ratio for GEM/CLF co-loaded liposome treatments than other liposomes. Cytotoxicity of CLF on bone cancer cells and also its synergistic effect with GEM on osteosarcoma is reported for the first time with this study. CLF's loading with GEM into liposome was also a new approach for enhancement of anticancer effect on Saos-2 cells. Therefore, GEM/CLF co-loaded liposomal delivery system is proposed as a novel approach for treatment of osteosarcoma.