Targeted delivery of chemotherapeutics to tumor cells is one of the biggest challenges in cancer treatment. Herein, we synthesized smart dipeptide nanoparticles for cancer-specific targeting and intracellular pH-sensitive release of chemotherapeutics. Diphenylalanine peptide was synthesized and further developed as nanoparticles (NPs), which were functionalized with folic acid utilizing the carbodiimide reaction. Doxorubicin (Dox) was loaded to self-assembled non-functionalized (FF-Dox) and folate functionalized peptides NPs (FA-FF-Dox). Moreover, the experiments revealed the pH-sensitive release of Dox for both FA-FF-Dox and FF-Dox due to the protonation of the Schiff base and the amines present in the peptides at low pH, enhancing intracellular release subsequent to receptor-mediated endocytosis. Further, biodistribution and the pharmacokinetics study revealed enhanced targeting efficiency of FA-FF-Dox with high accumulation in tumor cells.