The present investigation was aimed at developing PEGylated PLGA nanoparticles of cytarabine. PLGA Nanoparticles were prepared by modified nanoprecipitation method, optimized for mean particle size (152 +/- 6 nm) and entrapment efficiency (41.1 +/- 0.8%) by a 3(2) factorial design. The PEGylated PLGA nanoparticles of cytarabine had a zeta potential of -7.5 +/- 1.3mV and sustained the release of cytarabine for 48 h by Fickian diffusion. The IC(50) values for L1210 cells were 6.5, 5.3, and 2.2 mu M for cytarabine, cytarabine loaded PLGA nanoparticles and cytarabine loaded PLGA-mPEG nanoparticles respectively. Confocal microscopy and flow cytometry showed that the nanoparticles were internalized by the L1210 cells and not simply bound to their surface. Biodistribution studies showed that the PEGylated nanoparticles of cytarabine were present in significantly higher concentrations in blood circulation as well as in brain and bones and avoided RES uptake as compared to the free drug.