A series of copolymeric nanoparticles of methyl methacrylate and N-vinylcaprolactam were synthesized from microemulsions containing sodium dodecyl sulfate. Etoposide as a model drug was loaded in nanoparticles during in situ polymerization. Stable nanolatex were produced and characterized for size and shape by dynamic light scattering (DLS) and transmission electron microscopy. Particles were found to be spherical in nature with size less than 50 nm. Structural characterization of copolymers was done by infrared and nuclear magnetic resonance spectroscopy. Differential scanning calorimetery (DSC) and X-ray diffractometry (XRD) techniques were used to evaluate molecular level interaction of etoposide with nanoparticles. Drug encapsulation efficiency was determined by ultraviolet (UV) spectrometry and found to be 3567%. DSC, XRD, and UV data suggested the molecular level dispersion of drug in the nanoparticles. In vitro release studies and in vitro cytotoxicity showed prolonged and controlled release of etoposide from nanoparticles along with IC50 values of nanoparticles in the range of 0.010.1 mg/mL. (c) 2012 Wiley Periodicals, Inc. J. Appl. Polym. Sci. 2013