We report a continuous nanoscale encapsulation of cancer drugs 5-Fluorouracil (FU) and Paclitaxel into biocompatible polycaprolactone (PCL) nanofibers (NFs) using core-sheath electrospinning process. A high potential electric field of 19-23.2 kV was used to draw a compound solution jet from a specialized coaxial spinneret. Using of DMF in both core and Sheath resulted in NFs within 50-160 nm along with large beaded structures. Addition of Trichloromethane (TCM) or Trifluoroethanol (TFE) in sheath turned NFs in more uniform and thin fiber structure. The diameter range for paclitaxel encapsulated fibers was 22-90 nm with encapsulation efficiency of 77.5% and the amount of drug was only 4 to 5% of sheath polymer. Addition of PVA within core resulted drug nanocrystal formation outside of sheath and poor encapsulation efficiency (52%) with rapid initial release (52-53%) in first 3 days. Drug release test of NFs in different pH exhibited increase of release rate with the decrease of media pH. In-vitro cell viability test with FU encapsulated NFs in human prostatic cancer PC3 cells exhibited 38% alive cells at 5 μM concentration while in pristine FU 43% cells were alive. Paclitaxel encapsulated NFs with breast cancer cells also exhibited increased efficacy in comparison to pristine anticancer drugs. Continuous decrease of cell density indicated the slow release of cancer drugs from the NFs. Both PCL+Paclitaxel and PCL+5FU treated conditions caused breast cancer cell death between 40% to 50%.