Core/shell nanoparticles that display a pH-sensitive thermal response, self-assembled from the amphiphilic tercopolymer, poly(N-isopropylacrylamide-co-N,N-dimethylacrylamide-co-10-undecenoic acid) (P(NIPAAm-co-DMAAm-co-UA)), have recently been reported. In this study, folic acid is conjugated to the hydrophilic segment of the polymer through the free amine group (for targeting cancer cells that overexpress folate receptors) and cholesterol is grafted to the hydrophobic segment of the polymer. This polymer also self-assembles into core/shell nanoparticles that exhibit pH-induced temperature sensitivity, but they possess a more stable hydrophobic core than the original polymer P(NIPAAm-co-DMAAm-co-UA) and a shell containing folate molecules. An anticancer drug, doxorubicin (DOX), is encapsulated into the nanoparticles. DOX release is also pH-dependent. DOX molecules delivered by P(NIPAAm-co-DMAAm-co-UA) and folate-conjugated P(NIPAAm-co-DMAAm-co-UA)-g-cholesterol nanoparticles enter the nucleus more rapidly than those transported by P(NIPAAm-co-DMAAm)-b-poly(lactide-co-glycolide) nanoparticles, which are not pH sensitive. More importantly, these nanoparticles can recognize folate-receptor-expressing cancer cells. Compared to the nanoparticles without folate, the DOX-loaded nanoparticles with folate yield a greater cellular uptake because of the folate-receptor-mediated endocytosis process, and, thus, higher cytotoxicity results. These multifunctional polymer core/shell nanoparticles may make a promising carrier to target drugs to cancer cells and release the drug molecules to the cytoplasm inside the cells.