Background: Staphylococcus aureus in its biofilm form has been associated with recalcitrant chronic rhinosinusitis with significant resistance to conventional therapies. This study aims to determine if liposomal-encapsulation of a precursor of the naturally occurring antimicrobial nitric oxide (NO) enhances its desired anti-biofilm effects against S. aureus, in the hope that improving its efficacy can provide an effective topical agent for future clinical use. Methodology: S. aureus ATCC 25923 biofilms were grown in-vitro using the Minimum Biofilm Eradication Concentration (MBEC) device and exposed to 3 and 60 mg/mL of the NO donor isosorbide mononitrate (ISMN) encapsulated into different anionic liposomal formulations based on particle size (unilamellar ULV, multilamellar MLV) and lipid content (5 and 25 mM) at 24 h and 5 min exposure times. Biofilms were viewed using Live-Dead Baclight stain and confocal scanning laser microscopy and quantified using the software COMSTAT2. Results: At 3 and 60 mg/mL, ISMN-ULV liposomes had comparable and significant anti-biofilm effects compared to untreated control at 24 h exposure (p = 0.012 and 0.02 respectively). ULV blanks also had significant anti-biofilm effects at both 24 h and 5 min exposure (p = 0.02 and 0.047 respectively). At 5 min exposure, 60 mg/mL ISMN-MLV liposomes appeared to have greater anti-biofilm effects compared to pure ISMN or ULV particles. Increasing liposomal lipid content improved the anti-biofilm efficacy of both MLV and ULVs at 5 min exposure. Conclusion: Liposome-encapsulated "nitric oxide" is highly effective in eradicating S. aureus biofilms in-vitro, giving great promise for use in the clinical setting to treat this burdensome infection. Further studies however are needed to assess its safety and efficacy in-vivo before clinical translation is attempted.