The capsid of SV40 is regarded as a potential nano-capsule for delivery of biologically active materials. The SV40 capsid is composed of 72 pentamers of the VP1 major capsid protein and 72 copies of the minor coat proteins VP2/3. We have previously demonstrated that, when expressed in insect Sf9 cells by the baculovirus system, VP1 self-assembles into virus-like particles (VP1-VLPs), which are morphologically indistinguishable from the SV40 virion and can be easily purified. Here, we show that heterologous proteins fused to VP2/3 can be efficiently incorporated into the VP1-VLPs. Using EGFP as a model protein, we have optimized this encapsulation system and found that fusion to the C-terminus of VP2/3 is preferable and that the C-terminal VP1-interaction domain of VP2/3 is sufficient for incorporation into VLPs. The VLPs encapsulating EGFP retain the ability to attach to the cell surface and enter the cells. Using this system, we have encapsulated yeast cytosine deaminase (yCD), a prodrug-modifying enzyme that converts 5-fluorocytosine to 5-fluorouracil, into VLPs. When CV-1 cells are challenged by the yCD-encapsulating VLPs, they become sensitive to 5-fluorocytosine-induced cell death. Therefore, proteins of interest can be encapsulated in VP1-VLPs by fusion to VP2/3 and successfully delivered to cells.