A nanostructure lipid carrier (NLC) composed of solid, and liquid lipid as a core has been developed as a delivery system for hydrophobic drug molecules. The aim of this research was to fabricate an oleoyl-quaternized-chitosan (CS)-coated NLC, where the mucoadhesive property of nanoparticles is enhanced for more efficient drug delivery. NLC loaded with alpha-mangostin (AP), a model hydrophobic drug, were fabricated using a high pressure homogenization process and subsequently coated with CS. The fabricated nanoparticles showed particle sizes in the range of 200-400nm, with low polydispersity, high physical stability and excellent encapsulation efficiency (EE>90%). Additionally, in vitro viability, cytotoxicity and ability of NLC and CS-NLC to affect apoptosis in carcinoma Caco-2 cells were determined using the Triplex assay. Gene expressiom analysis were performed using quantitative reverse transcription Polymerase Chain Reaction (RT-qPCR). Moreover, in vivo toxicological testing of NLCs was conducted in zebrafish embryos. Results indicated that CS-NLC provieded high cytotoxicity than NLC itself. In the case of AP loaded nanoparticles, NLC loaded with AP (AP-NLC), and CS-NLC loaded with AP (CS-AP-NLC) exhibited higher cytotoxicity to Caco-2 over Hela cells. These results indicate that CS-NLC shows enhanced cellular uptake but increased cytotoxicity characteristics over NLC and therefore careful optimization of dosage and loading levels in CS-NLC is needed to allow cancer cell targeting, and for exploiting the potential of these systems in cancer therapy.