Targeted delivery of drugs to tumors represents a significant advance in cancer diagnosis and therapy. Therefore, development of novel tumor-specific ligands or pharmaceutical nanocarriers is highly desirable. In this study, we utilized phage display to identify a new targeting peptide, SP90, which specifically binds to breast cancer cells, and recognizes tumor tissues from breast cancer patients. We used confocal and electron microscopy to reveal that conjugation of SP90 with liposomes enables efficient delivery of drugs into cancer cells through endocytosis. Furthermore, in vivo fluorescent imaging demonstrated that SP90-conjugated quantum dots possess tumor-targeting properties. In tumor xenograft and orthotopic models, SP90-conjugated liposomal doxorubicin was found to improve the therapeutic index of the chemotherapeutic drug by selectively increasing its accumulation in tumors. We conclude that the targeting peptide SP90 has significant potential in improving the clinical benefits of chemotherapy in the treatment and the diagnosis of breast cancer.