Core-shell type lipid-polymer hybrid nanoparticles (CSLPHNPs) have emerged as a multifunctional drug delivery platform. The delivery system combines mechanical advantages of polymeric core and biomimetic advantages of the phospholipid shell into a single platform. We report the development of CSLPHNPs composed of the lipid monolayer shell and the biodegradable polymeric core for the delivery of erlotinib, an anticancer drug, clinically used to treat non-small cell lung cancer (NSCLC). Erlotinib loaded CSLPHNPs were prepared by previously reported single-step sonication method using polycaprolactone (PCL) as the biodegradable polymeric core and phospholipid-shell composed of hydrogenated soy phosphatidylcholine (HSPC) and 1,2-distearoyl-sn-glycero-3-phosphoethanolamine-N-[methoxy(polyethylene glycol)-2000 (DSPE-PEG2000). Erlotinib loaded CSLPHNPs were characterized for physicochemical properties including mean particle size, polydispersity index (PDI), zeta potential, morphology, thermal and infrared spectral analysis, drug loading, in vitro drug release, in vitro serum stability, and storage stability. The effect of critical formulation and process variables on two critical quality attributes (mean particle size and drug entrapment efficiency) of erlotinib loaded CSLPHNPs was studied and optimized. In addition, in vitro cellular uptake, luminescent cell viability assay and colony formation assay were performed to evaluate efficacy of erlotinib loaded CSLPHNPs in A549 cells, a human lung adenocarcinoma cell line. Optimized erlotinib loaded CSLPHNPs were prepared with mean particle size of about 170nm, PDI<0.2, drug entrapment efficiency of about 66% with good serum and storage stability. The evaluation of in vitro cellular efficacy results indicated enhanced uptake and efficacy of erlotinib loaded CSLPHNPs compared to erlotinib solution in A549 cells. Therefore, CSLPHNPs could be a potential delivery system for erlotinib in the therapy of NSCLC.