Low water solubility and hepatotoxicity limited the clinical use of 17-allylamino-17-demethoxy geldanamycin (17-AAG), an inhibitor of heat shock protein 90 (HSP90). Folate targeted polylactide-co-glycolide-polyethylene glycol-folic acid (PLGA-PEG-FA) nanoparticles containing 17-AAG were prepared and characterized. Cellular uptake and in vitro cytotoxicity of the prepared nanoparticles were determined in MCF-7 human breast cancer cells. The particle size of 17-AAG loaded folate targeted nanoparticles was 238.67±3.52 nm, drug loading was 8.25±2.49% and about 80% of drug was released from the nanoparticles over 10 days. Cellular uptake studies showed much higher intracellular uptake of folate targeted nanoparticle as compared to nontargeted nanoparticles. Cytotoxicity study showed 2 fold increase (P<0.05, n=3) in the cytotoxicity of folate targeted nanoparticle in comparison to free drug or nontargeted nanoparticles. Due to their targeting ability, nanometer size, high drug loading and controlled release behavior, 17-AAG loaded PLGA-PEG-FA nanoparticles might be developed as a targeted delivery system for breast and other cancer treatment.