In this study, galactose-based nanogels were prepared by reversible addition fragmentation chain transfer process to facilitate the targeted delivery of iodoazomycin arabinofuranoside (IAZA), a clinical drug for imaging solid hypoxic tumors, and evaluate its role in hypoxia-selective (radio)theranostic (therapy + diagnostic) management of therapy-resistant cancer cells. The nanogels have a cross-linked temperature-responsive core and a dense carbohydrate shell. Their thermoresponsive nature allowed the controlled encapsulation of IAZA drug for targeted delivery and release in hypoxic hepatocellular carcinoma via asialoglycoprotein receptor-mediated uptake. The synthesized nanogel-IAZA delivery systems demonstrated a stable, nonburst release of IAZA over 10 h with up to 0.6 mM loading capacity of IAZA within the nanogel. The cytotoxicity evaluations of the nanogels demonstrated that they are relatively nontoxic in multiple cell lines. The radiosensitization studies indicated that IAZA in encapsulated form offers a superior radiosensitization of hypoxic cells (sensitizer enhancement ratio for IAZA alone, 1.33; 1.62 for nanogel encapsulated IAZA). These studies suggest that galactose-based nanogels may serve as a versatile drug delivery system for IAZA (and other azomycin-based agents) and enable its hypoxia-selective multimodal theranostic applications to manage hypoxic solid (hepatocellular) tumors by facilitating position/single photon emission tomography-based imaging, external beam radiation therapy, and in situ molecular radiotherapy.