Polymeric materials have been used in a range of pharmaceutical and biotechnology products for more than 40 years. These materials have evolved from their earlier use as biodegradable products such as resorbable sutures, orthopaedic implants, macroscale and microscale drug delivery systems such as microparticles and wafers used as controlled drug release depots, to multifunctional nanoparticles (NPs) capable of targeting, and controlled release of therapeutic and diagnostic agents. These newer generations of targeted and controlled release polymeric NPs are now engineered to navigate the complex in vivo environment, and incorporate functionalities for achieving target specificity, control of drug concentration and exposure kinetics at the tissue, cell, and subcellular levels. Indeed this optimization of drug pharmacology as aided by careful design of multifunctional NPs can lead to improved drug safety and efficacy, and may be complimentary to drug enhancements that are traditionally achieved by medicinal chemistry. In this regard, polymeric NPs have the potential to result in a highly differentiated new class of therapeutics, distinct from the original active drugs used in their composition, and distinct from first generation NPs that largely facilitated drug formulation. A greater flexibility in the design of drug molecules themselves may also be facilitated following their incorporation into NPs, as drug properties (solubility, metabolism, plasma binding, biodistribution, target tissue accumulation) will no longer be constrained to the same extent by drug chemical composition, but also become in-part the function of the physicochemical properties of the NP. The combination of optimally designed drugs with optimally engineered polymeric NPs opens up the possibility of improved clinical outcomes that may not be achievable with the administration of drugs in their conventional form. In this critical review, we aim to provide insights into the design and development of targeted polymeric NPs and to highlight the challenges associated with the engineering of this novel class of therapeutics, including considerations of NP design optimization, development and biophysicochemical properties. Additionally, we highlight some recent examples from the literature, which demonstrate current trends and novel concepts in both the design and utility of targeted polymeric NPs (444 references).