The present study was aimed at developing and exploring the use of uncoated and PEGylated newer PAMAM dendrimers for delivery of anti-cancer drug 5-fluorouracil. For this study, successive Michael addition and exhaustive amidation reactions were used to synthesize 4.0 G PAMAM dendrimers, using ethylenediamine as core and methylmethacrylate as propagating agent. The dendrimer was PEGylated using N-hydroxysuccinimide-activated carboxymethyl MPEG-5000. IR and NMR data proved the synthesis. Various physicochemical parameters, SEM, TEM, lambda(max) values, hemolytic toxicity, drug entrapment, drug release and blood-level studies of both PEGylated and non-PEGylated systems were determined and compared. The PEGylation of the systems was found to have increased their drug-loading capacity, reduced their drug release rate and hemolytic toxicity. TEM study revealed surface properties of the systems. Stability studies had shown its stability at room temperature in dark. The systems were found suitable for prolonged delivery of an anti-cancer drug by in vitro and blood-level studies in albino rats, without producing any significant hematological disturbances. PEGylation has been found to be suitable for modification of PAMAM dendrimers for reduction of drug leakage and hemolytic toxicity. This, in turn, could improve drug-loading capacity and stabilize such systems in body. The study suggests use of such PEGylated dendrimeric systems as nanoparticulate depot type of system for drug administration.