Liposomes are versatile supramolecular assemblies widely used in basic and applied sciences. Here we present a novel microfluidics-based method, octanol-assisted liposome assembly (OLA), to form monodisperse, cell-sized (5–20 μm), unilamellar liposomes with excellent encapsulation efficiency. Akin to bubble blowing, an inner aqueous phase and a surrounding lipid-carrying 1-octanol phase is pinched off by outer fluid streams. Such hydrodynamic flow focusing results in double-emulsion droplets that spontaneously develop a side-connected 1-octanol pocket. Owing to interfacial energy minimization, the pocket splits off to yield fully assembled solvent-free liposomes within minutes. This solves the long-standing fundamental problem of prolonged presence of residual oil in the liposome bilayer. We demonstrate the unilamellarity of liposomes with functional α-haemolysin protein pores in the membrane and validate the biocompatibility by inner leaflet localization of bacterial divisome proteins (FtsZ and ZipA). OLA offers a versatile platform for future analytical tools, delivery systems, nanoreactors and synthetic cells.