The encapsulation of hydrophilic drugs is still a challenge due to their tendency to leak into the outer aqueous phase. The aim of the study is to develop and evaluate Ondansetron HCl (OND) loaded controlled release polymeric nanoparticles with high encapsulation efficiency (EE). Polymeric nanoparticles (PNPs) were prepared with two different types of polycaprolactone and five different types of poly (d, l-lactide-co-glycolide) (PLGA) by the double emulsion solvent evaporation method. The effects of formulation variables on the particle size, zeta potential, encapsulation efficiency, and drug release of OND loaded PNPs were investigated. The particle size, PDI, and zeta potential of the optimum formulation were 342.5 ± 6.7 nm, 0.240 ± 0.020, and −20.1 ± 0.51 mV, respectively, whereas the encapsulation efficiency was 46.8 ± 2.78%. The optimum formulation was pegylated to prolong the residence time in circulation. Transmission electron microscopy (TEM) images confirmed the spherical shape of nanoparticles. Pegylated formulation had 47.76 ± 1.69% encapsulation efficiency and sustained release profile (92.7 ± 5.7% in 72 h). Differential Calorimetry and Fourier Transform Infrared Spectroscopy indicated that the drug and excipients were compatible and the drug was encapsulated into nanoparticles. The comparison of drug release profiles demonstrated that drug release from nanoparticles prepared with both higher molecular weight and higher concentration polymers decelerated but the drug release accelerated as the amount of glycolide in the copolymer composition increased. Weibull kinetic model was found to fit best for OND release from PLGA-PNPs. The cytotoxicity effect of the pure drug, marketed drug (Zofer®), and optimized formulations were tested in the L929 cell line, and the results exhibited that the cell viability of optimized pegylated formulation was higher than 90% after 48 h of incubation.