Well-defined multiarm star polymer with hyperbranched polyglycerol as core and poly(2-hydroxyethyl methacrylate) (PHEMA) as arms were used as precursor for the preparation of inverted and aqueous micellar nanocapsules. The partial modification of the hydroxyl groups of PHEMA arms with aliphatic chains led to the formation of inverted micellar nanocapsules. The hydrophilic dye encapsulation capacity of the inverted micelles can be enhanced significantly by transforming the inner hydroxyl groups of PHEMA arms into quaternized amine groups. The modification of the outer and inner hydroxyl groups of PHEMA arms with polyethylene glycol acid chloride and pivaloyl chloride, respectively, resulted in aqueous micellar nanocapsule. (c) 2006 Elsevier B.V. All rights reserved.