To prepare glutaraldehyde-based cross-linked medium molecular weight chitosan nanoparticles encapsulated with 5-Fluorouracil (5-FU), to overcome dosing frequency as well as reducing acute oral toxicity and poor bioavailability of the drug. Medium molecular weight chitosan nanoparticles (MMWCH-NPs) were prepared by reverse micelles method based on glutaraldehyde (GA) cross-linking and optimized by the process as well as formulation variables like a various drug to polymer ratio, cross-linker volumes, varying stirring speeds (rpm), different time of rotation/stirring, respectively and their effects on the mean particles size distribution and entrapment efficiency %EE and %LC of NPs. Characterization of formulations was done by FTIR studies, TEM, PXRD, TGA, Stability, and dissolution drug release studies were performed by dialysis bag technique at both pH (1.2 & 7.4) and acute oral toxicity studies in albino rabbits. The formulated nanoparticles showed a smooth morphology with smaller particle size distribution (230–550 nm), zeta potential (−15 to −18 mV) required to achieve enhanced permeation and retention effect (EPR), entrapment efficiency (%EE 12–59%). These NPs exhibited a controlled drug release profile with 84.36% of the drug over a period of 24 h. Drug release data were fitted to different kinetic models which predominantly followed Fickian diffusion mechanism (R 2 = 0.972–0.976, N = 0.326–0.256). The optimized formulation (5-FU6) was observed under DSC/TGA, TEM. PXRD curves, FTIR, which confirmed thermal stability, structural integrity, amorphous state, compatibility between drug and polymer of optimized (5-FU6) as well as reduced acute oral toxicity in albino rabbits. Cross-linked medium molecular weight chitosan nanoparticles are nontoxic, well-tolerated therefore could be the future candidate for therapeutic effects as novel drug delivery carrier for anticancer drug(s).