A major challenge for future drug delivery is to release encapsulated drugs with both spatial and temporal control. Liposomes show great promise as drug delivery vehicles, but it is often necessary to compromise liposome stability for rapid drug release. Targeting liposomes to specific tissues requires developing highly specific ligands with strong affinities to receptors over-expressed on diseased cells. This high binding affinity can also lead to “binding-site barriers” in which the tightly bound nanocarriers prevent drug penetration into the tissue. To address the joint challenges of controlled release and specific targeting, we present a novel photo-activated nanoshell/liposome composite by which near-complete liposome contents release can be initiated within seconds by irradiating hollow gold nanoshells (HGN) with a near infrared (NIR) pulsed laser. Targeting the drug release is limited by the dimensions of the laser beam focus; no specific ligands or antibodies are required. The HGNs were encapsulated within liposomes or tethered to the outer surface of liposomes. Electron cryo-microscopy was used to confirm the encapsulation or tethering. We found free HGNs outside liposomes can also trigger release, but with lower efficiency. Absorbing pulsed NIR light causes the HGNs to rapidly increase in temperature leading to the formation of microbubbles, whose collapse causes transient membrane rupture and content release. LC-MS and quantitative PCR have been applied to confirm that majority of drug molecules were not damaged. This has potential applications in using optical triggered nanoshells to assist macro biomolecules to enter cells for gene delivery.