Polyethylene glycol (PEG) is a polymer used widely in drug delivery to create "stealth" nanoparticles (NPs); PEG coatings suppress NP detection and clearance by the immune system and beneficially increase NP circulation time in vivo. However, NP PEGylation typically obstructs cell attachment and uptake in vitro compared to the uncoated equivalent. Here, we report on a cationic liposome (CL) NP system loaded with the hydrophobic cancer drug paclitaxel (PTX) in which PEGylation (i.e. PEG-CL ptx NPs) unexpectedly enhances, rather than diminishes, delivery efficacy and cytotoxicity to human cancer cells. This highly unexpected enhancement occurs even when the PEG-chains coating the NP are in the transition regime between the mushroom and brush conformations. Cryogenic TEM of PEG-CL ptx NPs shows that PEG causes the proliferation of a mixture of sterically stabilized nanometer-scale vesicles and anisotropic micelles (e.g. bicelles). Remarkably, the onset of bicelles at sub-monolayer concentrations of the PEG-coat has to our knowledge not been previously reported; it was previously thought that PEG-lipid in this