Understanding the interactions between drug carriers and cells is of importance to enhance the delivery of therapeutics. The release of therapeutics into different intracellular environments, such as the lysosomes or the cell cytoplasm, will impact their pharmacological activity. Herein, we investigate the intracellular fate of layer-by-layer (LbL)-assembled, submicrometer-sized polymer hydrogel capsules in a human colon cancer derived cell line, LIM1899. The cellular uptake of the disulfide-stabilized poly(methacrylic acid) (PMA(SH)) capsules by colon cancer cells is a time-dependent process. Confocal laser scanning microscopy and transmission electron microscopy reveal that the internalized capsules are deformed in membrane-enclosed compartments, which further mature to late endosomes or lysosomes. We further demonstrate the utility of these redox-responsive PMA(SH) capsules for the delivery of doxorubicin (DOX) to colon cancer cells. The DOX-loaded PMA(SH) capsules demonstrate a 5000-fold enhanced cytotoxicity in cell viability studies compared to free DOX.