Nanoparticles enhance the therapeutic efficacy of an encapsulated drug by increasing and sustaining the delivery of the drug inside the cell. We have previously demonstrated that Aerosol OT (AOT)-alginate nanoparticles, a novel formulation developed recently in our laboratory, significantly enhance the therapeutic efficacy of encapsulated drugs like doxorubicin in drug-sensitive tumor cells. The purpose of this study is to evaluate the drug delivery potential of AOT-alginate nanoparticles in drug-resistant cells overexpressing the drug efflux transporter, P-glycoprotein (P-gp). AOT-alginate nanoparticles were formulated using an emulsion-cross-linking process. Rhodamine 123 and doxorubicin were used as model P-gp substrates. Cytotoxicity of nanoparticle-encapsulated doxorubicin and kinetics of nanoparticle-mediated cellular drug delivery were evaluated in both drug-sensitive and -resistant cell lines. AOT-alginate nanoparticles enhanced the cytotoxicity of doxorubicin significantly in drug-resistant cells. The enhancement in cytotoxicity with nanoparticles was sustained over a period of 10 days. Uptake studies with rhodamine-loaded nanoparticles indicated that nanoparticles significantly increased the level of drug accumulation in resistant cells at nanoparticle doses higher than 200 microg/mL. Blank nanoparticles also improved rhodamine accumulation in drug-resistant cells in a dose-dependent manner. Nanoparticle-mediated enhancement in rhodamine accumulation was not because of membrane permeabilization. Fluorescence microscopy studies demonstrated that nanoparticle-encapsulated doxorubicin was predominantly localized in the perinuclear vesicles and to a lesser extent in the nucleus, whereas free doxorubicin accumulated mainly in peripheral endocytic vesicles. Inhibition of P-gp-mediated rhodamine efflux with AOT-alginate nanoparticles was confirmed in primary brain microvessel endothelial cells. In conclusion, an AOT-alginate nanoparticle system enhanced the cellular delivery and therapeutic efficacy of P-gp substrates in P-gp-overexpressing cells.