In this study, PEG-derivatized octacosanol copolymer was successfully developed to improve the anti-tumor activity and eliminate toxicity of the commercial formulation of paclitaxel (PTX). MPEG2K-C28, the conjugation of monomethoxy Poly(ethylene glycol) 2000 and octacosanol, was readily soluble in aqueous solution and self-assembled to form micelles with small sizes (< 20 nm) that are efficient in encapsulating PTX with a drug loading of 9.38 ± 0.18% and an encapsulation efficiency of 93.90 ± 2.12%. Meanwhile, octacosanol is very safe for humans and amazingly exhibits antitumor activity through inhibition activity of matrix metalloproteinases (MMPs) and translocation of the transcription factor (nuclear factor-kappa B, NF-κB) to the nucleus, which may be able to promote synergistic effects with PTX. A sustained and slower in vitro release behavior was observed in the (PTX micelles) than that of Taxol. PTX micelles exhibited more potent cytotoxicity than Taxol in the 4T1 breast cancer cell line. More interestingly, MPEG2K-C28 selectively inhibited the growth of 4T1 cells rather than the normal cells (HEK293 and L929 cell lines), indicating the antitumor activity of octacosanol remained after conjugation with MPEG. Acute toxicity evaluations indicated that MPEG2K-C28 was a safe drug carrier. Pharmacokinetic study revealed that PTX micelles improved the T1/2 and AUC of PTX (compared with Taxol) from 1.910 ± 0.139 h and 13.999 ± 1.109 mg/l × h to 2.876 ± 0.532 h and 76.462 ± 8.619 mg/l × h in vivo, respectively. The maximal tolerated dose (MTD) for PTX micelles (ca. 120 mg PTX/kg) in mice was significantly higher than that for Taxol (ca. 20mg PTX/kg). PTX micelles exhibited slightly better antitumor activity than Taxol but safer in 4T1 breast cancer model in vivo. The cell apoptosis in the immunofluorescent studies and the cell proliferation in the immunohistochemical studies also proved the results. In conclusion, MPEG2K-C28 is a simple, safe and effective drug delivery carrier for PTX, and has some therapeutic effects in 4T1 cells in vitro. PTX micelles showed significant antitumor activity in vivo with low systemic toxicity in 4T1 breast cancer. MPEG2K-C28 micelles entrapping PTX deserve more studies in the future.