A commercial available amphiphilic polymer, Cholesterol terminated PEO (Chol-PEO), was used as novel biomimetic drug delivery system. The association behavior of Chol-PEOs in aqueous solution was studied by fluorescence probe technique and transmission electron microscope (TEM). Fluorescence excitation spectra for pyrene probe solubilized in the aggregates of Chol-PEOs suggested the presence of a critical micelle concentration (cmc) in water. TEM images of the aggregates suggested that the PEO block formed the biocompatible micelle coronas and the cholesterol block formed the hydrophobic micelle cores. These new biomimetic diblock copolymers were evaluated as nanocapsules for the delivery of hydrophobic drugs and drug release behavior of a hydrophobic anti-cancer drug, adriamycin (ADR), was examined.