To prepare a water-insoluble camptothecin (CPT) delivery carrier, hydrophobically modified glycol chitosan (HGC) nanoparticles were constructed by chemical conjugation of hydrophobic 5beta-cholanic acid moieties to the hydrophilic glycol chitosan backbone. Insoluble anticancer drug, CPT, was easily encapsulated into HGC nanoparticles by a dialysis method and the drug loading efficiency was above 80%. CPT-encapsulated HGC (CPT-HGC) nanoparticles formed nano-sized self-aggregates in aqueous media (280-330 nm in diameter) and showed sustained release of CPT for 1 week. Also, HGC nanoparticles effectively protected the active lactone ring of CPT from the hydrolysis under physiological condition, due to the encapsulation of CPT into the hydrophobic cores in the HGC nanoparticles. The CPT-HGC nanoparticles exhibited significant antitumor effects and high tumor targeting ability towards MDA-MB231 human breast cancer xenografts subcutaneously implanted in nude mice. Tumor growth was significantly inhibited after i.v. injection of CPT-HGC nanoparticles at doses of 10 mg/kg and 30 mg/kg, compared to free CPT at dose of 30 mg/kg. The significant antitumor efficacy of CPT-HGC nanoparticles was attributed to the ability of the nanoparticles to show both prolonged blood circulation and high accumulation in tumors, as confirmed by near infrared (NIR) fluorescence imaging systems. Thus, the delivery of CPT to tumor tissues at a high concentration, with the assistance of HGC nanoparticles, exerted a potent therapeutic effect. These results reveal the promising potential of HGC nanoparticles-encapsulated CPT as a stable and effective drug delivery system in cancer therapy.