Polymeric micelles are emerging as a highly integrated nanoplatform for cancer targeting, drug delivery and tumor imaging applications. In this study, we describe a multifunctional micelle (MFM) system that is encoded with a lung cancer-targeting peptide (LCP), and encapsulated with superparamagnetic iron oxide (SPIO) and doxorubicin (Doxo) for MR imaging and therapeutic delivery, respectively. The LCP-encoded MFM showed significantly increased alpha(v)beta(6)-dependent cell targeting in H2009 lung cancer cells over a scrambled peptide (SP)-encoded MFM control as well as in an alpha(v)beta(6)-negative H460 cell control. (3)H-Labeled MFM nanoparticles were used to quantify the time- and dose-dependent cell uptake of MFM nanoparticles with different peptide encoding (LCP vs SP) and surface densities (20% and 40%) in H2009 cells. LCP functionalization of the micelle surface increased uptake of the MFM by more than 3-fold compared to the SP control. These results were confirmed by confocal laser scanning microscopy, which further demonstrated the successful Doxo release from MFM and accumulation in the nucleus. SPIO clustering inside the micelle core resulted in high T(2) relaxivity (>400 Fe mM(-1) s(-1)) of the resulting MFM nanoparticles. T(2)-weighted MRI images showed clear contrast differences between H2009 cells incubated with LCP-encoded MFM over the SP-encoded MFM control. An ATP activity assay showed increased cytotoxicity of LCP-encoded MFM over SP-encoded MFM in H2009 cells (IC(50) values were 28.3 +/- 6.4 nM and 73.6 +/- 6.3 nM, respectively; p < 0.005). The integrated diagnostic and therapeutic design of MFM nanomedicine potentially allows for image-guided, target-specific treatment of lung cancer.