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Nanocrystals (NCs) enable the delivery of poorly water-soluble drugs with improved dissolution and bioavailability. However, their uncontrolled release and instability make targeted delivery challenging. Herein, a nano-in-nano delivery system composed of a drug nanocrystal core and liposome shell (NC@Lipo) is presented, which merges the advantages of drug nanocrystals (high drug loading) and liposomes (easy surface functionalization and high stability) for targeted delivery of hydrophobic drugs to tumors. CHMFL-ABL-053 (053), a hydrophobic drug candidate discovered by our group, was employed as a model drug to demonstrate the performance of NC@Lipo delivery system. Surface PEGylated (053-NC@PEG-Lipo) and folic acid-functionalized (053-NC@FA-Lipo) formulations were fabricated by wet ball milling combined with probe sonication. 053-NC@Lipo enabled high drug loading (up to 19.51%), considerably better colloidal stability, and longer circulation in vivo than 053-NC. Compared with free 053, 053-NC@PEG-Lipo and 053-NC@FA-Lipo exhibited higher tumor accumulation and considerably better in vivo antitumor efficacy in K562 xenograft mice with tumor growth inhibition rate (TGI) of up to 98%. Additionally, more effective tumor cell targeting in vitro and higher TGI in vivo were achieved with 053-NC@FA-Lipo. The NC@Lipo strategy may contribute to the targeted delivery of poorly water-soluble drugs with high drug loading, high stability, and tailorable surface, and has potential for the development of more efficient nanocrystal- and liposome-based formulations for commercial and clinical applications. It may also provide new opportunities for potential clinical application of candidate 053., (Copyright © 2021 Elsevier B.V. All rights reserved.)