Chitosan-graft-β-cyclodextrin (CS-g-β-CD) copolymer was synthesized by conjugating β-cyclodextrins to chitosan molecules through click chemistry. The copolymer structure was characterized by Fourier transform infrared spectroscopy (FTIR) and nuclear magnetic resonance (NMR). CS-g-β-CD/CMC nanoparticles were prepared by a polyelectrolyte complexation process in aqueous solution between CS-g-β-CD copolymer and carboxymethyl chitosan (CMC), which was used to load anticancer drug (Doxorubicin hydrochloride, DOX·HCl) with hydrophobic group. The particle size, surface charge, zeta potential, and morphology of the nanoparticles were characterized with dynamic light scattering. The drug loading efficiency and in vitro release of DOX·HCl of the nanoparticles were measured by ultraviolet spectrophotometer. The results demonstrated that the size, surface charge and drug loading efficiency of the nanoparticles could be modulated by the fabrication conditions. The drug loading efficiency of CS-g-β-CD/CMC nanoparticles was improved from 52.7% to 88.1% because of the presence of β-CD moieties with hydrophobic cavities, which can form inclusion complexes with the drug molecules. The in vitro release results showed that the CS-g-β-CD/CMC nanoparticles released DOX·HCl in a controlled manner, importantly overcoming the initial burst effect. These nanoparticles possess much potential to be developed as anticancer drug delivery systems, especially those drugs with hydrophobic group. © 2014 Wiley Periodicals, Inc. J. Appl. Polym. Sci. 2014, 131, 41034.