Intravesical chemotherapy is an important part of the treatment for superficial bladder cancer. However, the response to it is limited and its side effects are extensive. Functional single-walled carbon nanotubes (SWNT) have shown promise for tumor-targeted accumulation and low toxicity. In the present study, we performed in vivo and in vitro investigations to determine whether SWNT-based drug delivery could induce high tumor depression in rat bladder cancer and could decrease the side effects of pirarubicin (tetrahydropyranyl-adriamycin, THP). We modified SWNT with phospholipid-branched polyethylene glycol and constructed an SWNT-THP conjugate via a cleavable ester bond. The cytotoxicity of SWNT-THP against the human bladder cancer cell line BIU-87 was evaluated in vitro. Rat bladder cancer in situ models constructed by N-methyl-N-nitrosourea intravesical installation (1 g/L, 2 mg/rat once every 2 weeks for 8 weeks) were used for in vivo evaluation of the cytotoxicity of SWNT and SWNT-THP. Specific side effects in the THP group including urinary frequency (N = 12), macroscopic hematuria (N = 1), and vomiting (N = 7) were identified; however, no side effects were observed with SWNT-THP treatment. Flow cytometry was used to assess the cytotoxicity in vitro and in vivo. Results showed that SWNT alone did not yield significant tumor depression compared to saline (1.74 ± 0.56 and 1.23 ± 0.42%) in vitro. SWNT-THP exhibited higher tumor depression than THP-saline in vitro (74.35 ± 2.56 and 51.24 ± 1.45%) and in vivo (52.46 ± 2.41 and 96.85 ± 0.85%). The present findings indicate that SWNT delivery of THP for the treatment of bladder cancer leads to minimal side effects without loss of therapeutic efficacy. Therefore, this nanotechnology may play a crucial role in the improvement of intravesical treatment of bladder cancer.