Many prostate cancers relapse after initial chemotherapy treatment. Combining molecular and chemotherapy together with encapsulation of drugs in nanocarriers provides effective drug delivery and toxicity reduction. We developed core shell lipid-polymer hybrid nanoparticles (CSLPHNPs) with poly (lactic-co-glycolic acid) (PLGA) core and lipid layer containing docetaxel and clinically used inhibitor of sphingosine kinase 1 (SK1) FTY720 (fingolimod). We show for the first time that FTY720 (both free and in CSLPHNPs) re-sensitizes castrate resistant prostate cancer cells and tumors to docetaxel, allowing a four-fold reduction in effective dose. Our CSLPHNPs showed high serum stability and a long shelf life. CSLPHNPs demonstrated a steady uptake by tumor cells, sustained intracellular drug release and in vitro efficacy superior to free therapies. In a mouse model of human prostate cancer, CSLPHNPs showed excellent tumor targeting and significantly lower side effects compared to free drugs, importantly, reversing lymphopenia induced by FTY720. Overall, we demonstrate that nanoparticle encapsulation can improve targeting, provide low off-target toxicity and most importantly reduce FTY720-induced lymphopenia, suggesting its potential use in clinical cancer treatment.