Layer-by-Layer (LbL) stepwise self-assembly of the polyelectrolytes poly(allylamine hydrochloride) and poly(styrenesulfonate) was used to create a macromolecular nanoshell around drug nanoparticles (approximately 150 nm in diameter). Dexamethasone, a steroid often used in conjugation with chemotherapy, was chosen as a model drug and was formulated into nanoparticles using a modified solvent-evaporation emulsification method. Measurement of the zeta potential (zeta-potential) after each polyelectrolyte layer was electrostatically added confirmed the successful addition of each layer. Additionally, data acquired from X-ray photon spectroscopy (XPS) indicated the presence of peaks representative of each physisorbed polyelectrolyte layer. Surface modification of the nanoshell was performed by covalently attaching poly(ethylene glycol) (PEG) with a molecular weight of 2000 to the outer surface of the nanoshell. Zeta potential measurements and XPS indicated the presence of PEG chains at the surface of the nanoshell. The polymeric nanoshell on the surface of the drug nanoparticle provides a template upon which surface modifications can be made to create a stealth or targeted drug delivery system.