Theragnostic multifunctional nanoparticles hold great promise in simultaneous diagnosis of disease, targeted drug delivery with minimal toxicity, and monitoring of treatment. One of the current challenges in cancer treatment is enhancing the tumor-specific targeting of both imaging probes and anticancer agents. Herein, we report tumor-homing chitosan-based nanoparticles (CNPs) that simultaneously execute cancer diagnosis and therapy (cancer theragnosis). These CNPs are unique for their three distinctive characteristics, such as stability in serum, deformability, and rapid uptake by tumor cells. These properties are critical in increasing their tumor targeting specificity and reducing their nonspecific uptake by normal tissues. To develop these CNPs into novel theragnostic nanoparticles, we labeled them with Cy5.5, a near-infrared fluorescent (NIRF) dye, for imaging and also loaded them with paclitaxel (PTX-CNPs), an anticancer drug, for cancer treatment. Cy5.5 labeled PTX-CNPs exhibited significantly increased tumor-homing ability with low nonspecific uptake by other tissues in SCC7 tumor-bearing mice. Theragnostic nanoparticles, Cy5.5 labeled PTX-CNPs, are highly useful for simultaneous diagnosis of early-stage cancer and drug delivery.