This study aimed to optimize poly(ethylene glycol)-b-poly(epsilon-caprolactone) (PEG-b-PCL)-based amphiphilic block copolymers for achieving a better micellar drug delivery system (DDS) with improved solubilization and delivery of doxorubicin (DOX). First, the Flory-Huggins interaction parameters between DOX and the core-forming segments [i.e., poly(epsilon-caprolactone) (PCL) and poly[(epsilon-caprolactone-co-gamma-(carbamic acid benzyl ester)-epsilon-caprolactone] (P(CL-co-CABCL))] was calculated to assess the drug polymer compatibility. The results indicated a better compatibility between DOX and P(CL-co-CABCL) than that between DOX and PCL, motivating the synthesis of monomethoxy-poly(ethylene glycol)-b-poly[(epsilon-caprolactone-co-gamma(carbamic acid benzyl ester)-epsilon-caprolactone] (rnPEG-b-P(CL-co-CABCL)) block copolymer. Second, two novel block copolymers of mPEG-b-P(CL-co-CABCL) with different compositions were prepared via ring-opening polymerization of CL and CABCL using mPEG as a macroinitiator and characterized by H-1 NMR, FT-TR, GPC, WAX]), and DSC techniques. It was found that the introduction of CABCL decreased the crystallinity of mPEG-b-PCL copolymer. Micellar formation of the copolymers in aqueous solution was investigated with fluorescence spectroscopy, DLS and TEM. mPEG-b-P (CL-co-CABCL) copolymers had a lower critical micelle concentration (CMC) than mPEG-b-PCL and subsequently led to an improved stability of prepared micelles. Furthermore, both higher loading capacity and slower in vitro release of DOX were observed for micelles of copolymers with increased content of CABCL, attributed to both improved drug core compatibility and favorable amorphous core structure. Meanwhile, DOX-loaded micelles facilitated better uptake of DOX by HepG2 cells and were mainly retained in the cytosol, whereas free DOX accumulated more in the nuclei. However, possibly because of the slower intracellular release of DOX, DOX-loaded micelles were less potent in inhibiting cell proliferation than free DOX in vitro. Taken together, the introduction of CABCL in the core-forming block of mPEG-b-PCL resulted in micelles with superior properties, which hold great promise for drug delivery applications.