This dissertation demonstrates the application of optimized functional nanomedicine in treating a variety of cancer at preclinical stage. Our studies focus on peptide-targeted formulations by going after extracellular biomarkers, designing and optimizing ligands accordingly by tuning multivalency and avidity, as well as adjusting selectivity towards target cells by biophysical and chemical modifications of nanoparticles. Chapter 2 and 3 describes the significance of designing rational prodrugs to achieve controlled and selective treatment in multiple myeloma and lung carcinoma, respectively. Importantly, the combined strategy of optimized targeting ligand and prodrugs containing chemical linkers susceptible to hydrolytic enzymes at endosome of cancer cells, has proven to be most efficacious for inhibiting tumor progression and limiting toxicity in the studies described within these chapters. In chapters 4 through 6, a systematic approach to achieve endosomal escape and target immune cell are explored. Endosomal escape of gene-modulating proteins has been a bottleneck in the last three decades that presents substantial challenges in achieving therapeutic outcomes for treating genetic disorders and abnormalities. Here, histidine-rich ionizable lipids were designed for peptide-targeted lipid-based nanoparticle formulations and were evaluated in multiple myeloma and breast cancer using biochemical and cell-based assays to achieve endosomal escape in vitro. In chapter 5, the importance of targeting tumor associated macrophages has been described and peptide-targeted liposomal nanoparticle formulations were developed to specifically reprogram pro-tumorigenic macrophages. Moreover, siRNA loaded targeted nanoparticle formulations demonstrated significantly reduced tumor burden in an aggressive lung tumor model. My research has the potential to significantly enhance clinical prognosis by delivering therapeutics selectively and safely and improving the quality of patients' lives. Furthermore, the approaches described in this thesis have the possibility to overcome existing challenges of poor clinical outcomes in cancer treatments, such as less effective treatment, shorter life expectancy, poorer prognosis, and greater risk of cancer relapse in already suffering patients. The majority of nanomedicine used in cancer treatment, vaccination, diagnostics, fungal treatment, or analgesics, are FDA-approved lipid-based nanoparticles, that have not been targeted yet. Since the first approval of Doxil in 1995, nanomedicine has garnered attention and more startups and top-notch biotech-based companies are fiercely pursuing lipid-based therapeutics in clinical investigations. Since now we have information about the human genome and advanced tools to adjust therapeutics according to tumor heterogeneity and molecularly defined populations, there are exciting opportunities and potentials to bring more innovative nanomedicine therapies for effective treatment in the future.