Sustained drug delivery requires the use of multifunctional devices with enhanced properties. These properties include responsiveness to external stimuli (such as temperature, pH, ionic strength), ability to deliver suitably designed ligands to specific receptors, enhanced bioadhesion to cells, and cytocompatibility. Microgels represent one of such multifunctional drug delivery devices. Recently, we described the fabrication of a stable colloidal aqueous suspension of cytocompatible microgel spheres based on a poly(vinyl alcohol)/poly(methacrylate-co-N-isopropylacrylamide) network (Ghugare, S.; Mozetic, P.; Paradossi, G. Biomacromolecules 2009, 10, 1589). These microgel spheres undergo an entropy-driven volume phase transition around the physiological temperature, this phase transition being driven by the incorporation of NiPAAm residues in the network. In that study, the microgel was loaded with the anticancer drug doxorubicin. As the microgel shrank, a marked increase in the amount of doxorubicin released was noted. Indeed, dynamic light scattering measurements showed the diameter reduction to be about 50%. In the present paper, we focus on some fundamental issues regarding modifications of the hydrogel architecture at a nanoscopic level as well as of the diffusive behavior of water associated with the polymer network around the volume phase transition temperature (VPTT). Sieving and size exclusion effects were studied by laser scanning confocal microscopy with the microgel exposed to fluorescent probes with different molecular weights. Confocal microscopy observations at room temperature and at 40 degrees C (i.e., below and above the VPTT) provided an evaluation of the variation of the average pore size (from 5 nm to less than 3 nm). Using quasielastic neutron scattering (QENS) with the IRIS spectrometer at ISIS, UK, the diffusive behavior of water molecules closely associated to the polymer network around the VPTI' was investigated. A clear change in the values of diffusion coefficient of bound water was observed at the transition temperature. In addition, the local dynamics of the polymer itself was probed using the QENS spectrometer SPHERES at FRM II, Germany. For this study, the microgel was swollen in D2O. An average characteristic distance of about 5 angstrom for the localized chain motions was evaluated from the elastic incoherent structure factor (EISF) and from the Q-dependence of the Lorentzian width.