The hydrophilic nature of hydrogel matrices makes them disadvantageous to entrap poorly soluble therapeutic agents and greatly restricts their applications as drug-delivery systems. In this study, we demonstrated that sustained delivery of lipophilic drugs in hydrogel-based devices can be readily achieved by enhancing retention of drugs within micelles. This nanoscale drug-entrapment strategy was applied to develop a polymeric drug-eluting stent. Sirolimus, a lipophilic anti-proliferative/immunosuppressive drug, was entrapped into the hydrophobic core of Pluronic L121 micelles and then blended in a chitosan-based strip and crosslinked by an epoxy compound to fabricate test stents. It was found that the use of such a nanoscale drug-entrapment strategy was able to significantly increase the loading efficiency of lipophilic drugs, prevent the drug from aggregation and beneficially reduce its initial burst release; thus, the duration of drug release was extended considerably. When implanting the stent in rabbit infrarenal abdominal aortas, in-stent restenosis was markedly reduced and less inflammatory reaction was observed, while unfavorable effects such as delayed endothelial healing caused by the overdose of sirolimus could be significantly evaded.