Polymeric micelles based on poly(ethylene oxide)-b-poly(ε-caprolactone) PEO-b-PCL or poly(ethylene oxide)-b-poly(α-benzyl carboxylate-ε-caprolactone) PEO-b-PBCL block copolymers were prepared and decorated with either c(RGDfK) or p160, a cancer cell-specific peptide ligand, on their surface. The cellular uptake of p160-decorated PEO-b-PBCL micelles containing DiI fluorescent label by MDA-MB-435 cancer cells was assessed and compared to that for c(RGDfK)-decorated micelles. The hydrophobic anticancer drug paclitaxel (PTX) was physically encapsulated into PEO-b-PCL or PEO-b-PBCL micelles (with and without peptide ligands) using a dialysis technique. The effect of the micellar formulation on the specificity of encapsulated PTX against cancer cells was assessed by investigating the in vitro cytotoxicity of free and encapsulated PTX against MDA-MB-435 cancer cell line versus two normal cells, Human Umbilical Vein Endothelial Cells (HUVEC) and MCF10A cells, using the MTT assay. Our results showed both peptide ligands to facilitate the association of micelles with MDA-MB-435 cells. The p160-micelles, however showed better binding and internalizing in MDA-MB-435 cells than c(RGDfK)-micelles. In general, peptide decoration enhanced the selective cytotoxicity of encapsulated PTX against MDA-MB-435 cells over normal HUVEC and MCF10A cells. The extent of this increase in cancer cell specificity for encapsulated PTX was more for p160-decorated micelles than c(RGDfK)-decorated ones.