Glioblastoma is a hostile brain tumor associated with high infiltration leading to poor prognosis. Currently available treatment options are insufficient to increase median survival time. The combination therapy has emerged as an efficient way to deliver chemotherapeutics for treatment of glioblastoma. It provides collaborative approach of targeting cancer cells by acting via multiple mechanisms, thereby reducing drug resistance. However, the presence of selective and impermeable blood brain barrier (BBB) restricts the delivery of chemotherapeutic drugs into the brain. To overcome this limitation, we designed a dual functionalized liposomes by modifying their surface with transferrin (Tf) and a cell penetrating peptide (CPP) for receptor and adsorptive mediated transcytosis, respectively. In this study, we used various CPPs based on their physicochemical properties (TAT, penetratin, QLPVM and PFVYLI) and investigated the influence of insertion of CPP to Tf-liposomes on cytotoxic potential, cellular uptake, hemocompatibility and transport across the BBB both in vitro and in vivo. In addition, anti-tumor efficacy of dual functionalized liposomes was evaluated in vitro as well as in vivo. The liposomes were encapsulated with chemotherapeutics agents, doxorubicin and erlotinib for delivery to brain. Co-delivery of doxorubicin and erlotinib loaded Tf-CPP liposomes revealed significantly (p < 0.05) higher translocation more than 12 % across the co-culture endothelial barrier resulting in regression of tumor in the in vitro brain tumor model. The biodistribution of Tf-CPP liposomes demonstrated more than 10 and 2.7 fold increase in doxorubicin and erlotinib accumulation in mice brain, respectively compared to free drugs. Histological evaluation of tissue sections showed no signs of toxicity. In addition, Tf-Pen liposomes showed excellent antitumor efficacy by regressing ~90% of tumor in mice brain with significant increase in the median survival time (36 days). In conclusion, we have developed a high efficiency liposomal drug delivery carrier that can cross the BBB and co-deliver doxorubicin and erlotinib to desired target tumor site in vivo in mice, thereby 1) increased concentration of chemotherapeutics in brain, 2) regression in glioblastoma tumor size, 3) reducing the possibility of drug resistance in cancer cells, without eliciting undesired toxicity.