Drug nanocrystals (NCs) are colloidal dispersions composed almost entirely of drug. As such, there is substantial interest in targeting them to diseased tissues, where they can locally deliver high doses of the therapeutic. However, because of their uncontrolled dissolution characteristics in vivo and uptake by the monomolecular phagocyte system, achieving tumor accumulation is challenging. To address these issues, a layer-by-layer approach is adopted to coat paclitaxel NCs with alternating layers of oppositely charged polyelectrolytes, using a PEGylated copolymer as the top layer. The coating successfully slows down dissolution in comparison to the noncoated NCs and to Abraxane (an approved paclitaxel nanoformulation), provides colloidal stability in physiologically relevant media, and has no intrinsic effect on cell viability at the concentrations tested. Nevertheless, their pharmacokinetic and biodistribution profile indicates that the NCs are rapidly cleared from the bloodstream followed by accumulation in the mononuclear phagocyte system organs (i.e., liver and spleen). This is hypothesized to be a consequence of the shedding of the PEGylated polyelectrolyte from the NCs' surface. While therapeutic efficacy was not investigated (due to poor tumor accumulation), overall, this work questions whether approaches that rely solely on electrostatic interactions for retaining coatings on the surfaces of NCs are appropriate for use in vivo.