In situ gellable thermosensitive poly(N-isopropylacrylamide-co-acrylamide) (designated as PNIP/AAm) nanogel aqueous dispersions were prepared through precipitation polymerization. Their thermosensitive volume phase transition and in situ gel-forming behavior were investigated. 5-Fluorouracil (5-Fu) and bovine serum albumin (BSA) were used as model drugs. The drug-loading properties of PNIP/AAm nanogel particles and release behavior from in situ gelatinized PNIP/AAm nanogel aqueous dispersions were investigated. The prepared PNIP/AAm nanogel particles and aqueous dispersions show good thermosensitivity. The presence of the drugs in the systems has no significant influence upon the thermosensitivity of the systems. In addition, the amount of cross-linker used in the preparation of the PNIP/AAm nanogel has little influence upon the drug-loading capability of PNIP/AAm nanogel particles and also on the release behavior from gelatinized dispersions. It was found that the drug-loading efficacy and entrapment efficiency of PNIP/AAm nanogel particles for low molecular weight 5-Fu was higher than that for biomacromolecular BSA. Furthermore, the cumulative release ratios of 5-Fu from in situ gelatinized PNIP/AAm nanogel aqueous dispersions were distinctly higher than that of BSA. These results imply potential application of prepared thermosensitive nanogel dispersions as embolizing and tissue engineering materials.