Folate-modified lipid nanocapsule encapsulated quercetin (QT-FALNC) was prepared with phase inversion method. The formulation was optimized by simplex lattice design with encapsulation efficiency and drug loading as index. The encapsulation efficiency and drug loading of the optimal formulation were 96.01% and 2.98%, respectively. The drug concentration in QT-FALNC suspension was 4.29 mg/mL. Under transmission electron microscopy, the QT-FALNC showed spherical shape with a narrow size distribution. The particle size and zeta potential of QT-FALNC were 36.2 nm and -4.76 mV, respectively. The pharmacokinetics study in rats showed that the mean retention time (MRT0-∞) of the non-targeting lipid nanocapsules (LNC) loading quercetin (QT-LNC) and the targeting QT-FALNC was 12.981 h and 15.086 h, respectively, indicating that LNC could prolong the effect of QT in vivo. The in vitro anti-proliferative activity and cellar uptake of QT-FALNC were studied on Hela and MCF-7/MDR cells. The results showed that both QT-LNC and QT-FALNC displayed a stronger cell-killing effect than free QT. The in vivo anti-tumor study indicated that both QT-LNC and QT-FALNC showed the significant inhibition effect on tumor growth in H22 tumor-bearing mice compared with the control. It can be concluded that lipid nanocapsule is a potential carrier for improving solubility and biological activity of QT.