We reported previously the development of SMFv-PE38KDEL type I mutant (PE38KDEL-I; Mut-I), a recombinant immunotoxin in which a single-chain antibody derived from mouse SM5-1 monoclonal antibody is genetically fused to PE38KDEL-I. In comparison with the SMFv-PE38KDEL wild-type, Mut-I showed improved therapeutic efficacy and reduced toxicity. To overcome the problems associated with the immune response to the Pseudomonas exotoxin A (PE) component of Mut-I, we have constructed PE38KDEL-I-loaded poly(lactic-co-glycolic acid) nanoparticles conjugated with F(ab') fragments of a humanized SM5-1 monoclonal antibody (PE-NP-S). PE-NP-S specifically bound to SM5-1 binding protein-expressing hepatocellular carcinoma cell lines and was then internalized by these cells, resulting in significant cytotoxic effect. In SM5-1 binding protein-overexpressing tumor xenograft model, administration of PE-NP-S significantly inhibited tumor development and induced tumor regression. Moreover, PE-NP-S was shown to be much weaker in inducing vascular leakage syndrome in mice than Mut-I. The LD(50) of PE-NP-S was about 4-fold higher than that of Mut-I. Remarkably, PE-NP-S was of low immunogenicity in development of anti-PE neutralizing antibodies in vivo and was less susceptible to inactivation by anti-PE neutralizing antibodies compared with Mut-I. In conclusion, the resultant PE-NP-S possessed increased cancer therapeutic efficacy and had reduced nonspecific toxicity and immunogenicity, suggesting that it is a potential candidate in cancer therapy.