To increase the local concentration of tamoxifen in estrogen receptor (ER) positive breast cancer, we have developed and characterized nanoparticle formulation using poly(epsilon -caprolactone) (PCL). The nanoparticles were prepared by solvent displacement method using acetone-water system. Particle size analysis, scanning electron microscopy, zeta potential measurements, and differential scanning calorimetry (DSC) were used for nanoparticle characterization. Biodegradation studies were performed in the presence and absence of Pseudomonas lipase in phosphate-buffered saline (PBS, pH 7.4) at 37 degrees C. Tamoxifen loading over different concentrations was analyzed by high-performance liquid chromatography (HPLC) and the optimum loading concentration was determined. In vitro release studies were performed in 0.5% (w/v) sodium lauryl sulfate (SLS) containing PBS at 37 degrees C. Cellular uptake and distribution of fluorescent-labeled nanoparticles was examined in MCF-7 breast cancer cells. SEM micrographs and Coulter analysis showed nanoparticles with spherical shape and uniform size distribution (250-300 nm), respectively. Zeta potential analysis revealed a positive surface charge of +25 mV on the tamoxifen-loaded formulation. Being hydrophobic crystalline polyester, PCL did not degrade in PBS alone, but the degradation was enhanced by the presence of lipase. The maximum tamoxifen loading efficiency was 64%. Initial burst release of tamoxifen was observed, probably due to significant surface presence of the drug on the nanoparticles. A large fraction of the administered nanoparticle dose was taken up by MCF-7 cells through non-specific endocytosis. The nanoparticles were found in the perinuclear region after 1 h. Results of the study suggest that nanoparticle formulations of selective ER modulators, like tamoxifen, would provide increased therapeutic benefit by delivering the drug in the vicinity of the ER.