Caffeic acid phenethyl ester (CAPE) is a natural compound with anticancer activities but has low water solubility. In this work, sucrose fatty acid ester (SFAE) was used to nanoencapsulate CAPE in aqueous propylene glycol (PG) with a temperature-cycle method by heating at 90 degrees C for 20 min and cooling to 21 degrees C, followed by additional heating at 90 degrees C for 5 min and cooling to 21 degrees C. A higher amount of PG facilitated encapsulation with up to 0.1%w/w CAPE in 1.0% w/w SFAE. Additional 0.3%w/w thymol further improved the CAPE loading capability to 0.15%w/w to form nanoparticles smaller than 100 nm and stable in 30 days at 21 degrees C. Nanoencapsulation enhanced cytotoxicity of CAPE against colon cancer HCT-116 and breast cancer MCF-7 cells, and thymol additionally enhanced the cytotoxicity of CAPE dispersions. This work provides a new approach to nanoencapsulate CAPE in stable aqueous dispersions with improved cytotoxicity.