Multifunctional nanoparticles are designed to enhance drug delivery and therapeutic efficacy by incorporating targeting and imaging capabilities. While clinically-approved nanoparticles have shown value in reducing drug toxicity, their clinical outcomes are not always improved. The addition of functionalities like targeting and imaging increases complexity, cost, and regulatory challenges. This review discusses the benefits and limitations of adding targeting and imaging features to nanoparticles for improving small-molecule anti-cancer drug efficacy. Targeting nanoparticles can enhance drug delivery to tumors by increasing tumor accumulation and reducing systemic toxicity. However, targeting may compromise nanoparticle stealth properties and increase clearance by the host. The effectiveness of targeting depends on factors such as receptor density on tumor cells and the presence of unique receptors on normal tissues. Targeting can also lead to off-target effects, especially if the tumor microenvironment changes. Nanoparticles can be functionalized with targeting ligands that bind to receptors on cancer cells, improving drug delivery and therapeutic efficacy. However, the addition of targeting ligands may increase nanoparticle size, which can hinder diffusion and penetration into tumors. The use of targeting ligands can also lead to unexpected adverse cellular responses. Imaging agents can be incorporated into nanoparticles to monitor drug delivery and therapeutic efficacy. However, the addition of imaging agents increases the cost and complexity of nanoparticle synthesis and purification. The benefits of imaging agents may be offset by the increased cost and regulatory hurdles. Theranostic nanoparticles combine therapeutic and imaging functions, allowing for simultaneous drug delivery and imaging. However, the addition of imaging agents may compromise the therapeutic efficacy of nanoparticles. The design of theranostic nanoparticles requires a balance between optimal imaging and therapeutic features. The development of multifunctional nanoparticles is a complex process that involves trade-offs between functionality, cost, and regulatory challenges. The choice of targeting ligands and imaging agents is critical in determining the success of nanoparticle-based therapies. The future of nanoparticle-based therapies depends on the ability to develop efficient and cost-effective multifunctional nanoparticles that can improve patient outcomes.Multifunctional nanoparticles are designed to enhance drug delivery and therapeutic efficacy by incorporating targeting and imaging capabilities. While clinically-approved nanoparticles have shown value in reducing drug toxicity, their clinical outcomes are not always improved. The addition of functionalities like targeting and imaging increases complexity, cost, and regulatory challenges. This review discusses the benefits and limitations of adding targeting and imaging features to nanoparticles for improving small-molecule anti-cancer drug efficacy. Targeting nanoparticles can enhance drug delivery to tumors by increasing tumor accumulation and reducing systemic toxicity. However, targeting may compromise nanoparticle stealth properties and increase clearance by the host. The effectiveness of targeting depends on factors such as receptor density on tumor cells and the presence of unique receptors on normal tissues. Targeting can also lead to off-target effects, especially if the tumor microenvironment changes. Nanoparticles can be functionalized with targeting ligands that bind to receptors on cancer cells, improving drug delivery and therapeutic efficacy. However, the addition of targeting ligands may increase nanoparticle size, which can hinder diffusion and penetration into tumors. The use of targeting ligands can also lead to unexpected adverse cellular responses. Imaging agents can be incorporated into nanoparticles to monitor drug delivery and therapeutic efficacy. However, the addition of imaging agents increases the cost and complexity of nanoparticle synthesis and purification. The benefits of imaging agents may be offset by the increased cost and regulatory hurdles. Theranostic nanoparticles combine therapeutic and imaging functions, allowing for simultaneous drug delivery and imaging. However, the addition of imaging agents may compromise the therapeutic efficacy of nanoparticles. The design of theranostic nanoparticles requires a balance between optimal imaging and therapeutic features. The development of multifunctional nanoparticles is a complex process that involves trade-offs between functionality, cost, and regulatory challenges. The choice of targeting ligands and imaging agents is critical in determining the success of nanoparticle-based therapies. The future of nanoparticle-based therapies depends on the ability to develop efficient and cost-effective multifunctional nanoparticles that can improve patient outcomes.