The objective of the study was to investigate the cytotoxicity and cellular uptake of prepared 5-Fluorouracil (5-FU) nano hydrogel formulation using KB oral cancer cell line and VERO fibroblast cell line. The biodegradable thermoresponsive modified methylcellulose (MMC) polymer was used for the preparation of nano hydrogel, whereas it shows a sol-gel phase transition at 36˚C to 40˚C. The physical crosslinking method was used, followed by probe sonication for the preparation of 5-FU loaded MMC nano hydrogel. The mechanism of crosslinking was studied by FT-IR and SEM. These experimental techniques explained physical crosslinking viz. H-bonding phenomenon with the interconnected porous structure of nanoscale pore size. Cytotoxicity assay in the concentration range from 1 µg/ml to 2000µg/ml shows an IC50 value at around 250µg/ml. This nano hydrogel shows concentration-dependent toxicity to the cancer cells while they were less toxic to normal fibroblast VERO cells. Cellular uptake was confirmed by the green fluorescence inside cells by Rhodamine-B conjugation using a fluorescent microscope. These results depict that 5-FU loaded thermosensitive nano hydrogel may be a promising candidate for intratumoral targeted drug delivery to cancer cells.