Drug targeting is an active area of research and nano-scaled drug delivery systems hold tremendous potential for the treatment of neoplasms. In this study, a novel cyclodextrin (CD)-based nanoparticle drug delivery system has been assembled and characterized for the therapy of folate receptor-positive [FR(+)] cancer. Water-soluble folic acid (FA)-conjugated CD carriers (FACDs) were successfully synthesized and their structures were confirmed by 1D/2D nuclear magnetic resonance (NMR), matrix-assisted laser desorption ionization time-of-flight mass spectrometer (MALDI-TOF-MS), high performance liquid chromatography (HPLC), Fourier transform infrared spectroscopy (FTIR), and circular dichroism. Drug complexes of adamatane (Ada) and cytotoxic doxorubicin (Dox) with FACD were readily obtained by mixed solvent precipitation. The average size of FACD-Ada-Dox was 1.5-2.5 nm. The host-guest association constant K a was 1,639 M(-1) as determined by induced circular dichroism and the hydrophilicity of the FACDs was greatly enhanced compared to unmodified CD. Cellular uptake and FR binding competitive experiments demonstrated an efficient and preferentially targeted delivery of Dox into FR-positive tumor cells and a sustained drug release profile was seen in vitro. The delivery of Dox into FR(+) cancer cells via endocytosis was observed by confocal microscopy and drug uptake of the targeted nanoparticles was 8-fold greater than that of non-targeted drug complexes. Our docking results suggest that FA, FACD and FACD-Ada-Dox could bind human hedgehog interacting protein that contains a FR domain. Mouse cardiomyocytes as well as fibroblast treated with FACD-Ada-Dox had significantly lower levels of reactive oxygen species, with increased content of glutathione and glutathione peroxidase activity, indicating a reduced potential for Dox-induced cardiotoxicity. These results indicate that the targeted drug complex possesses high drug association and sustained drug release properties with good biocompatibility and physiological stability. The novel FA-conjugated β-CD based drug complex might be promising as an anti-tumor treatment for FR(+) cancer.