This study was aimed to develop doxorubicin loaded quaternary ammonium palmitoyl glycol chitosan (DOX-GCPQ) nanoformulation for DOX delivery and non-invasive monitoring of DOX accumulation and biodistribution at tumor site utilizing DOX’s self-florescent property. DOX-GCPQ amphiphilic polymeric nanoformulations were prepared and optimized using artificial neural network (ANN) and characterized for surface morphology by atomic force microscopy, particle size with polydispersity index (PDI) and zeta potential by dynamic light scattering. FTIR and XRD studies were performed to examine drug polymer interaction. The ANN-optimized nanoformulation was investigated for in-vitro release, cellular, tumor and tissue uptake. Since a nanoformulation, on accounts of the smaller size and higher surface to volume ratio alters its biological behavior and encapsulated therapeutic agent, the newly developed nanoformulation-based drug delivery system was also assessed for its toxicity and safety. The optimized DOX-GCPQ nanoformulation was anionic spherical micelles with hydrodynamic particle size of 97.8 ± 1.5 nm, PDI <0.3, zeta potential 28 ± 2mV and encapsulation efficiency of 81 ± 1.5%. Nanoformulation demonstrated a sustained release pattern over 48 h, assuming Weibull model. Fluorescence microscopy revealed higher uptake of DOX-GCPQ in Human Rhabdomyosarcoma (RD) cells as compared to free DOX. In-vitro cytotoxicity assay indicated a significant cytotoxicity of DOX-GCPQ against RD cells as compared to DOX and blank GCPQ (P < 0.05). DOX-GCPQ exhibited low IC50 (1.7 ± 0.404 µmol) when compared to that of DOX (3.0 ± 0.968 µmol). In skin tumor xenografts, optical imaging revealed significantly lower DOX II GCPQ in heart and liver (P < 0.05) and accumulated mainly in tumor (P < 0.05) as compared to other tissues. For toxicological studies, the optimized and characterized DOX-GCPQ was for size, charge, population dispersity, stability, encapsulation efficiency and in-vitro biocompatibility against rat’s whole blood. Apoptosis was studied in Human Rhabdomyosarcoma (RD) cells. DNA damage was investigated in rat bone marrow using in-vivo micronucleus assay. Hemo-, nephro-, hepato- and cardio- toxicities were studied after three dose cycles (6mg/kg each) in DOX vs DOX GCPQ treated mice keeping untreated group as healthy control. DOX-GCPQ demonstrated higher hemocompatibility, significant apoptotic potential as compared to DOX alone. Rat bone marrow examination depicted fewer micronucleus formation after 24 h of single oral dose of DOX-GCPQ (6mg/kg). Significant (P<0.001) decrease in whole body weight and weights of heart, liver and kidney was observed in DOX vs DOX-GCPQ. DOX induced nephron-, hepato- and cardio-toxicities were indicated by significantly (p<0.0001) high serum biomarkers (urea, uric acid, creatinine, ALT, AST, ALP, total bilirubin, CK, CK-MB, LDH); and low antioxidant enzyme (SOD, CAT, GSH, MDH) levels when compared with DOX-GCPQ. Mild vascular congestion in liver and kidney tissues was observed with DOX-GCPQ, while DOX induced vasculature changes coupled with marked vascular congestion, and distorted glomerulus. DOX raised cardiac risk ratio and atherogenic coefficient that modifies lipid metabolism. However, a mild vascular congestion in liver, kidney and heart tissues, nevertheless comparatively lesser than DOX was found with DOX-GCPQ. DOX significantly (p<0.005) reduced serum lipid markers and raised serum electrolytes (p<0.005) in contrast to control. DOX-GCPQ nanoformulation sustained (p>0.005) above parameters. The features of nanoformulation, i.e., small particle size, sustained drug release, enhanced cellular uptake, potential to target tumor passively coupled with the possibility of monitoring of tumor localization by optical imaging may make DOX-GCPQ an efficient nanotheranostic system which may also work as future safe drug carrier system with reduced DOX-induced organ toxicity.