Indocyanine green (ICG) is an FDA-approved near-infrared fluorescent dye that has been used in optical imaging and photothermal therapy. Its rapid in vivo clearance and photo-degradation have limited its application. ICG pharmacokinetics and biodistribution have been improved via liposomal encapsulation, while its photothermal stability has been enhanced by ICG J-aggregate (IJA) formation. In the present work, we report a simple approach to engineer a nano-sized, highly stable IJA liposomal formulation. Our results showed that lipid film hydration and extrusion method led to efficient IJA formation in rigid DSPC liposomes, as supported by molecular dynamics modeling. The engineered DSPC-IJA formulation was nano-sized, and with spectroscopic and photothermal properties comparable to free IJA. Promisingly, DSPC-IJA exhibited high fluorescence, which enabled its in vivo tracking, showing prolonged blood circulation and significantly higher tumor fluorescence signals, compared to free ICG and IJA. Furthermore, DSPC-IJA demonstrated high photo-stability in vivo after multiple cycles of 808 nm laser irradiation. Finally, doxorubicin was loaded into liposomal IJA to utilize the co-delivery capabilities of liposomes. In conclusion, with both liposomes and ICG being clinically approved, our novel liposomal IJA could offer a clinically relevant theranostic platform enabling multimodal imaging and combinatory chemo- and photothermal cancer therapy.