Cationic nanoparticles of chitosan (CS), poly-epsilon-caprolactone coated with chitosan (CS-PCL) and poly-epsilon-caprolactone coated with poly-L-lysine (PLL-PCL) were developed to encapsulate intravesical chemotherapeutic agent Mitomycin C (MMC) for longer residence time, higher local drug concentration and prevention of drug loss during bladder discharge. Nanoparticle diameters varied between 180 and 340 nm depending on polymer used for preparation and coating. Zeta potential values demonstrated positive charge expected from cationic nanoparticles. MMC encapsulation efficiency depended on hydrophilicity of polymers since MMC is water-soluble. Encapsulation was increased by 2-fold for CS-PCL and 3-fold for PLL-PCL as a consequence of hydrophilic coating. Complete drug release was obtained with only CS-PCL nanoparticles. On the other hand, CS and PLL-PCL nanoparticles did not completely liberate MMC due to strong polymer-drug interactions which were elucidated with DSC studies. As far as cellular interaction was concerned, CS-PCL was the most efficient formulation for uptake of fluorescent markers Nile Red and Rhodamine123 incorporated into nanoparticles. Especially, CS-PCL nanoparticles loaded with Rhodamine123 sharing hydrophilic properties with MMC were selectively incorporated by bladder cancer cell line, but not by normal bladder epithelial cells. CS-PCL nanoparticles seem to be promising for MMC delivery with respect to anticancer efficacy tested against MB49 bladder carcinoma cell line.