Biodegradable PLGA nanoparticles, loaded with 5-fluorouracil (5FU), were prepared using a double emulsion method and characterised in terms of mean diameter, zeta potential, entrapment efficiency and in vitro release. Poly (vinyl alcohol) was used to modify both internal and external aqueous phases and shown have a significant effect on nanoparticulate size, encapsulation efficiency and the initial burst release. Addition of poly (ethylene glycol) to the particle matrix, as part of the polymeric backbone, improved significantly the encapsulation efficiency. 5FU-loaded NPs were spherical in shape and negatively charged with a size range of 185–350 nm. Biological evaluation was performed in vivo using a solid Ehrlich carcinoma (SEC) murine model. An optimised 5FU-loaded formulation containing PEG as part of a block copolymer induced a pronounced reduction in tumour volume and tumour weight, together with an improved percentage tumour growth inhibition. Drug-loaded nanoparticles showed no significant toxicity or associated changes on liver and kidney function in tested animals, whereas increased alanine aminotransferase, aspartate aminotransferase and serum creatinine were observed in animals treated with free 5FU. Histopathological examination demonstrated enhanced cytotoxic action of 5FU-loaded nanoparticles when compared to the free drug. Based on these findings, it was concluded that nano-encapsulation of 5FU using PEGylated PLGA improved encapsulation and sustained in vitro release. This leads to increased anti-tumour efficacy against SEC, with a reduction in adverse effects.