Abstract: This study aimed to prepare and characterize chitosan nanoparticles encapsulating a nicotinamide derivative (Ni-CS-NP). Additionally, the therapeutic effectiveness, cytotoxicity, selectivity, and immunomodulatory properties of Ni-CS-NP were evaluated in human breast and colon cancer cell lines. Chitosan nanoparticles have shown potential as drug delivery carriers due to their biocompatibility and controlled release properties. Encapsulating a nicotinamide derivative further enhances the therapeutic potential of these nanoparticles. Computational studies were employed to validate the binding interactions, providing crucial insights into the formulation's stability and effectiveness. The primary objective was to assess the cytotoxicity and safety profiles of Ni-CS-NP in human cancer cell lines. Moreover, this study aimed to investigate the specific mechanisms underlying its cytotoxic effects, including its impact on cell cycle progression, apoptosis induction, and immunomodulation. Ni-CS-NP were synthesized using the ionic gelation method and characterized using Fourier-transform infrared spectroscopy (FT-IR), scanning electron microscopy (SEM), transmission electron microscopy (TEM), and thermo gravimetric analysis. The cytotoxicity was evaluated in breast and colon cancer cell lines through the MTT assay. Selectivity indices were calculated to determine the safety profiles. The inhibition of VEGFR-2, induction of apoptosis, cell cycle disruption, and immunomodulatory effects were assessed through molecular assays. Computational analysis demonstrated favorable binding interactions through the Ni-CS-NP complex. The characterization studies confirmed the successful synthesis of Ni-CS-NP with well-defined structural and thermal properties. Ni-CS-NP exhibited remarkable cytotoxicity with a superior safety profile against MCF7 and HCT 116 cell lines showing IC50 values of 2.32 and 2.70 μM, respectively, surpassing sorafenib's efficacy (IC50 = 4.12 and 7.55 μM, respectively). Additionally, Ni-CS-NP effectively inhibited VEGFR-2, induced both early and late apoptosis, and disrupted the cell cycle progression in MCF7 cells. Notably, Ni-CS-NP demonstrated significant immunomodulatory effects by reducing TNF-α and IL-2 levels compared to dexamethasone. The encapsulation of a nicotinamide derivative within chitosan nanoparticles (Ni-CS-NP) through the ionic gelation method proved successful. Ni-CS-NP displayed potent cytotoxicity, superior safety profiles, and promising immunomodulatory effects in human breast cancer cells. These findings highlight the potential of Ni-CS-NP as a novel therapeutic agent for breast cancer treatment, warranting further investigation for clinical applications.