Therapeutic nanoparticles (NPs) can deliver cytotoxic chemotherapeutics and other drugs more safely and efficiently to patients; furthermore, selective delivery to target tissues can theoretically be accomplished actively through coating NPs with molecular ligands, and passively through exploiting physiological “enhanced permeability and retention” features. However, clinical trial results have been mixed in showing improved efficacy with drug nano-encapsulation, largely due to heterogeneous NP accumulation at target sites across patients. Thus, a clear need exists to better understand why many NP strategies fail in vivo and not result in significantly improved tumor uptake or therapeutic response. Multicolor in vivo confocal fluorescence imaging (intravital microscopy; IVM) enables integrated pharmacokinetic and pharmacodynamic (PK/PD) measurement at the single-cell level, and has helped answer key questions regarding the biological mechanisms of in vivo NP behavior. This review summarizes progress to date and also describes useful technical strategies for successful IVM experimentation.