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Bufalin is a traditional oriental medicine which is known to induce apoptosis in many tumor cells, and it is thus considered as a new anticancer therapeutic. By now, most of the studies of bufalin are in vitro, however in vivo evaluations of its therapeutic efficacy are less and are in great demand for its development toward anticancer drug. One of the problems probably hampering the development of bufalin is the lack of tumor selectivity, which may reduce the therapeutic effect as well as showing side effects. To overcome this drawback, in this study, we designed a tumor-targeted drug delivery system of bufalin based on enhanced permeability and retention (EPR) effect, by using biotinylated chitosan, resulting in bufalin encapsulating nanoparticles (Bu-BCS-NPs) with mean hydrodynamic size of 171.6 nm, as evidenced by dynamic light scattering and transmission electron microscope. Bu-BCS-NPs showed a relative slow and almost linear release of bufalin, and about 36.8% of bufalin was released in 24 h when dissolved in sodium phosphate buffer. Compared to native bufalin, Bu-BCS-NPs exhibited a stronger cytotoxicity against breast cancer MCF-7 cells (IC50 of 0.582 μg/ml vs 1.896 μg/ml of native bufalin). Similar results were also obtained in intracellular reactive oxygen species production, apoptosis induction, and decrease in mitochondria membrane potential. These results may contribute to the rapid intracellular uptake of nanoparticles, partly benefiting from the highly expressed biotin receptors in tumor cells. In vivo studies using MCF-7 tumor models in nude mice confirmed the remarkable therapeutic effect of Bu-BCS-NPs. These findings suggest the potential of Bu-BCS-NPs as an anticancer drug with tumor targeting property. [ABSTRACT FROM AUTHOR]