Poly(N-isopropylacrylamide-co-hydroxyethyl methacrylate) [P(NIPAM-co-HEMA)] copolymer was synthesized by controlled radical polymerization from respective N-isopropylacrylamide (NIPAM) and hydroxyethyl methacrylate (HEMA) monomers with a predetermined ratio. To prepare the thermosensitive and biodegradable nanoparticles, new thermosensitive graft copolymer, poly(L-lactide)-graft-poly(N-isoporylacrylamide-co-hydroxyethyl methacrylate) [PLLA-g-P(NIPAM-co-HEMA)], with the lower critical solution temperature (LCST) near the normal body temperature, was synthesized by ring opening polymerization of L-lactide in the presence of P(NIPAM-coHEMA). The amphiphilic property of the graft copolymers was formed by the grafting of the PLLA hydrophobic chains onto the PNIPAM based hydrophilic backbone. Therefore, the graft copolymers can self-assemble into uniformly spherical micelles o about 150-240 nm in diameter as observed by the field emission scanning electron microscope and dynamic light scattering. Dexamethasone can be loaded into these nanostructures during dialysis with a relative high loading capacity and its in vitro release depends on temperature. Above the LCST, most of the drugs were released from the drug-loaded micelles, whereas a large amount of drugs still remains in the micelles after 48 h below the LCST. (C) 2011 Wiley Periodicals, Inc. J Appl Polym Sci 123: 2368-2376, 2012