Paclitaxel, an antimicrotubular agent used in the treatment of ovarian and breast cancer, was encapsulated in nanoparticles of poly(DL-lactide-co-glycolide) and poly(ε-caprolactone) polymers using the double emulsion–solvent evaporation technique. The morphology, size distribution, drug encapsulation efficiency, thermal degradation and in-vitro drug release profile were characterized. High-performance liquid chromatography was used to determine the drug encapsulation efficiency and in-vitro drug release profile. MCF-7 breast cancer cells were used to evaluate the cytotoxicity (MTT assay), the cellular uptake and the cell cycle. The particle size was in the range of 200–400 nm. Poly(lactide-co-glycolide) nanoparticles showed more effective cellular uptake compared with those of poly(ε-caprolactone). Unloaded nanoparticles were found to be cytocompatible on MCF-7 cells and paclitaxel formulations showed efficacy in killing MCF-7 cells. Paclitaxel-loaded nanoparticles induced the release of the drug-blocking cells in the G2/M phase. Paclitaxel-loaded nanoparticles may be considered a promising drug delivery system in the evaluation of an in-vivo model.