The drug loading and releasing properties of poly(lactic-co-glycolic acid) (PLGA) were approached with the application of neutron techniques. The neutron reflection (NR) study on the response of PLGA material to vapor and to bulk water revealed that the hydration of PLGA origins from the molecular compatibility between water and PLGA. Hydration is reversible with regard to the change in humidity and temperature. Capecitabine as drug was embedded in the electrospun PLGA fibers. Small angle neutron scattering (SANS) was able to disclose the domain of entrapped drug inside the fibers and trace its evolution over time when the electrospun membrane was incubated in D2O buffer solution. The evolution of drug domains is discussed in terms of the concentration dependence, the temperature dependence, and the relevance between the drug diffusion inside the polymer matrix and the drug release out to the medium. It was observed that, at 20 °C the drug-related domains are relatively small (~ 100 Å) and relax extremely slow while at 37 °C the drug-related domains are relatively larger (~ 200 Å) and relax faster. These behaviors can be related to the glassy property of structural material. The transportation of drug through the polymer matrix relies on the global relaxation of PLGA chains. The variation of fiber diameter vs. incubation time was followed by ultra-small angle neutron scattering (USANS). The bi-phasic or tri-phasic release kinetics from a series of fibers with different drug loading (2%, 5%, 10%, 20%, 30%, 40%, 50%) were discussed based on the SANS and USANS discovery.