Chitosan (CHT) based biodegradable nanovectors were synthesized and modified with poly ethylene glycol 4000 (PEG-4000). CHT having medium molecular weight with 75% to 85% deacetylation was phthaloylated with phthalic anhydride, followed by PEGylation using PEG-4000. After confirmation of successful PEGylation by fourier transforminfra red spectroscopy (FTIR), the modified polymer was further processed to develop the nanocarrier using ionic gelation method by the addition of sodium tripolyphosphate (NaTPP). The prepared nanocarriers were subjected to physicochemical evaluation. The surface morphology of the particles was observed under scanning electron microscope (SEM), and particle size by dynamic light scattering (DLS) method, which was about 159-170nm in diameter. The zeta potential of the prepared nanovectors was +0.907mV which was due to cationic nature of nanovectors. The cell viability studies were also conducted to find the suitability of the carrier for in-vivo application, using liver cancerous cells (Hep G2). The findings have disclosed the concentration dependent activities of the particles, as viability of the cell was shown to be decreased with the increase in the concentration of the particles. Conclusively, the study was successful in determining the toxicity profile of these nanovectors as these were proved non-toxic at specific concentration.