Stable self-assembled nanoparticles were prepared by mixing aqueous solutions containing chitosan and either sulfobutylether β-cyclodextrin or sulfobutylether γ-cyclodextrin at pH 4. The nanoparticle formation was monitored by UV-VIS spectroscopy operated at 700 nm. The stability of the nanoparticle system was tested under different conditions, for example upon storage, upon dilution, at elevated temperatures and upon salt addition. The effect of media pH on the formation and stability of the nanoparticles was also tested. Stability studies were followed by dynamic light scattering measurements and showed that the nanoparticles are stable at all conditions tested except in basic media. The nanoparticles were investigated by transmission electron microscopy which confirmed that the diameter of the nanoparticles is between 100 and 200 nm. Drug release from the particles was studied using hydrocortisone as a model drug.