Poly(ethylene glycol) grafted octadecyl quaternized carboxymethyl chitosan (PEG-g-OQC) copolymers were synthesized to both improve the biocompatibility of OQC and form PEGylated cationic polymeric liposomes (CPLs), which composed of the mixture of OQC, cholesterol, and PEG-g-OQC. Structure of the copolymers was characterized by using Fourier transform infrared spectroscopy (FTIR), proton nuclear magnetic resonance spectroscopy (1H-NMR), and X-ray diffraction (XRD). The methyl tetrazolium (MTT) assay with L929 cell lines confirmed that PEGylation can decrease the cytotoxicity of OQC. PEGylated CPL nanoparticles (NPs) can be prepared by adding different weight ratio of PEG-g-OQC in the mixture. Paclitaxel was successfully incorporated into PEGylated CPLs with high drug encapsulating efficiency (>90%) and drug loading capacity (>15%). Physical stability experiment showed that paclitaxel-loaded PEGylated CPLs was stable with little change of particle size and size distribution in the condition of freeze-dried by adding mannitol or in high temperature and high pressure. Power or reagent of drug-loaded PEGylated CPLs showed a slow steady release profile for paclitaxel. These results show that PEG-g-OQC and CPLs have potential application as a drug delivery vehicle. (c) 2012 Wiley Periodicals, Inc. J Appl Polym Sci, 2012