To study the preparation process of paclitaxel liposomes, and determine its effect on human gastric cancer MGC803 cells. Orthogonal experiment was employed to study the preparation process of paclitaxel liposomes, and MTT assay was used to detect its effect of paclitaxel liposomes on cells. Changes in cell structure were observed by light microscopy, while cell cycle distribution of MGC803 cells was detected by flow cytometry. Factors influencing the encapsulation efficiency of paclitaxel liposomes were, in the order of importance, proportion of hydrogenated phospholipid to paclitaxel, weight proportion of phospholipid to cholesterol, and rotary evaporation temperature. Furthermore, optimal preparation process of paclitaxel liposomes was identified as phospholipid to cholesterol weight ratio of 20:4.28, hydrogenated phospholipid to paclitaxel weight ratio of 20:1, and rotary evaporation temperature of 60°C. 24 ~ 72 h after treatment of MGC803 cells, different doses of paclitaxel test solutions could all reduce MGC803 cell viability. Flow cytometry results showed that paclitaxel had a very significant effect on MGC803 cell cycle distribution. Under electron microscope, paclitaxel-treated MGC803 cells presented ill-defined boundaries, reduced glycogen, swollen organelles, liquefactive necrosis and liquefaction degeneration of cytoplasm. Besides, number of mitochondria decreased, with residual organelle debris visible only. Paclitaxel liposomes have an inhibitory effect on gastric cancer MGC803 cells without suppressing normal cells at tested doses.