Liposome-mediated delivery is a possible means to overcome several shortcomings with C. elegans as a model for identifying and testing drugs that retard aging. These include interactions between drugs and the nematodes’ bacterial food source, and failure of drugs to be taken up into nematode tissues. To explore this, we have tested liposome-mediated delivery of a range of fluorescent dyes and drugs in C. elegans. Liposome encapsulation led to enhanced effects on lifespan, using smaller quantities of compound, and enhanced uptake of three dyes into the gut lumen. However, one dye (Texas red) did not cross into nematode tissues, indicating that liposomes cannot ensure uptake of any compound. Of six compounds previously reported to extend lifespan (vitamin C, N-acetylcysteine, glutathione (GSH), trimethadione, thioflavin T (ThT) and rapamycin), this effect was reproduced for the latter four in a condition-dependent manner. For GSH and ThT, antibiotics abrogated life extension, implying a bacterially-mediated effect. With GSH, this was attributable to reduced early death from pharyngeal infection, and associated with alterations of mitochondrial morphology in a manner suggesting a possible innate immune training effect. By contrast, ThT exhibited antibiotic effects. For rapamycin, significant increases in lifespan were only seen when bacterial proliferation was prevented. These results document the utility and limitations of liposome-mediated drug delivery for C. elegans. They also show how nematode-bacteria interactions can determine the effects of compounds on C. elegans lifespan in a variety of ways.