Encapsulation of drugs in nanoparticles can enhance the accumulation of drugs in tumours, reduce toxicity toward healthy tissue, and improve pharmacokinetics compared to administration of free drug. To achieve efficient delivery and release of drugs at the target site, mechanisms of interaction between the nanoparticles and cells and the mechanism of delivery of the encapsulated drug are crucial to understand. Our aim was to determine the mechanisms for cellular uptake of a fluorescent hydrophobic model drug from poly(butylcyanoacrylate) nanoparticles. Prostate adenocarcinoma cells were incubated with Nile Red-loaded nanoparticles or free Nile Red. Uptake and intracellular distribution were evaluated by flow cytometry and confocal laser scanning microscopy. The nanoparticles mediated a higher intracellular level and more rapid uptake of encapsulated Nile Red compared to model drug administered alone. The main mechanism for delivery was not by endocytosis of nanoparticles but by nanoparticle-cell contact-mediated transfer directly to the cytosol and, to a smaller extent, release of payload from nanoparticles into the medium followed by diffusion into cells. The payload thus avoids entering the endocytic pathway, evading lysosomal degradation and instead gains direct access to intracellular targets. The nanoparticles are promising tools for efficient intracellular delivery of hydrophobic anticancer drugs; therefore, they are clinically relevant for improved cancer therapy.