In this study, pH‐responsive amphiphilic chitosan (CS) nanoparticles were used to encapsulate quercetin (QCT) for sustained release in cancer therapy. The novel CS derivatives were obtained by synthesis with 2,3‐epoxy‐1‐propanol, also known as glycidol, followed by acylation with dodecyl aldehyde. Characterization was performed by spectroscopic, viscosimetric, and size‐determination methods. Critical aggregation concentration, morphology, entrapment efficiency, drug release profile, cytotoxicity, and hemocompatibility studies were also carried out. The average size distribution of the self‐assembling nanoparticles measured by dynamic light scattering ranged from 140 to 300 nm. In vitro QCT release and Korsmeyer–Peppas model indicated that pH had a major role in drug release. Cytotoxicity assessments indicated that the nanoparticles were non‐cytotoxic. 3‐(4,5‐Dimethylthiazol‐2‐yl)‐2,5‐diphenyltetrazolium bromide assay further revealed that QCT‐loaded nanoparticles could inhibit MCF‐7 cell growth. In vitro erythrocyte‐induced hemolysis indicated the good hemocompatibility of the nanoparticles. These results suggest that the synthesized copolymers might be potential carriers for hydrophobic drugs in cancer therapy. © 2017 Wiley Periodicals, Inc. J. Appl. Polym. Sci. 2018, 135, 45678.