The encapsulation of hydrophilic drug in polymeric nanoparticles with high loading remains a challenge due to the rapid penetration of the drug to the external aqueous phase. In order to improve the encapsulation efficiency of daunorubicin (DNR) in poly(D,L-lactic-co-glycolic acid (PLGA) and poly(D,L-lactic acid) (PDLLA) nanoparticles, we fabricated a series of DNR-loaded nanoparticles using a modified double-emulsion solvent evaporation/diffusion method, which introduced a partially water-soluble organic solvent into the particle formation. The influence of various preparation parameters was investigated systematically, such as the ratio of organic solvent, the type of surfactant, the type of polymers and the molecular weight. Results showed that regular spherical PLGA nanoparticles with diameters of 200-300 nm could be produced with a remarkably high DNR encapsulation efficiency (>80%) and loading (6.5% (w/w)). Upon encapsulation, the sustained release of DNR could be controlled over 2 weeks. The results of FT-IR and DSC analysis indicated that the encapsulated DNR in polymeric nanoparticles was inclusion, not absorption. Furthermore, optimized DNR/PLGA nanoparticles showed a significant enhancement of cellular uptake, higher cytotoxicity against HL-60 cells compared with free DNR. These results were potentially useful for the nanoparticle formulation of hydrophilic chemotherapeutic drugs that require efficient delivery to cancer cells as well as sustained release at the specific site.