Lutein bioavailability is limited because of its poor aqueous solubility. In this study, lutein-poly (lactic-co-glycolic acid) (PLGA)-polyethylene glycol (PEG) nanocapsules were prepared to improve the solubility, bioavailability, and anticancer property of lutein. The scanning electron microscopy and dynamic light scattering examination revealed that the nanocapsules are smooth and spherical with size ranging from 80 to 500 nm (mean = 200 nm). In vitro lutein release profile from nanocapsules showed controlled sustainable release (66%) up to 72 h. Aqueous solubility of lutein nanocapsules was much higher by 735-fold than the lutein. Fourier transform infrared spectroscopy analyses showed no chemical interaction among PLGA, PEG, and lutein, indicating possible weak intermolecular forces like hydrogen bonds. X-ray diffraction revealed lutein is distributed in a disordered amorphous state in nanocapsules. Postprandial plasma kinetics (area under the curve) of an oral dose of lutein from nanocapsules was higher by 5.4-fold compared with that of micellar lutein (control). The antiproliferative effect of lutein from nanocapsules (IC50 value, 10.9 μM) was higher (43.6%) than the lutein (IC50 value, 25 μM). Results suggest that PLGA-PEG nanocapsule is an efficient carrier for enhancing hydrophilicity, bioavailability, and anticancer property of lipophilic molecules such as lutein.