Solid tumors are often poorly irrigated due to structurally compromised microcirculation. Uncontrolled multiplication of cancer cells, insufficient blood flow, and the lack of enough oxygen and nutrients lead to the development of hypoxic regions in the tumor tissues. As the partial pressure of oxygen drops below the necessary level (10 psi), the cancer cells modulate their genetic makeup to survive. Hypoxia triggers tumor progression by enhancing angiogenesis, cancer stem cell production, remodeling of the extracellular matrix, and epigenetic changes in the cancer cells. However, the hypoxic regions are usually located deep in the tumors and are usually inaccessible to the intravenously injected drug carrier or the drug. Considering the designs of the reported nanoparticles, it is likely that the drug is delivered to the peripheral tumor tissues, close to the blood vessels. In this study, we prepared lipid nanoparticles (LNs) comprising the synthesized hypoxia-responsive lipid and a peptide-lipid conjugate. We observed that the resultant LNs penetrated to the hypoxic regions of the tumors. Under low oxygen partial pressure, the hypoxia-responsive lipid undergoes reduction, destabilizing the lipid membrane, and releasing encapsulated drugs from the nanoparticles. We demonstrated the results employing spheroidal cultures of the pancreatic cancer cells BxPC-3. We observed that the peptide-decorated, drug encapsulated LNs reduced the viability of pancreatic cancer cells of the spheroids to 35% under hypoxic conditions.