Selective cytotoxicity to cancer cells without compromising their normal counterparts pose a huge challenge for traditional drug design. Here we developed a tumor antigen targeted delivery of immunonanoparticle carrying a novel non-immunosuppressive FTY720 derivative OSU-2S with potent cytotoxicity against leukemic B cells. OSU-2S induces activation of protein phosphatase 2A, phosphorylation and nuclear translocation of SHP1(S591) and deregulation of multiple cellular processes in chronic lymphocytic leukemia (CLL) resulting in potent cytotoxicity. To preclude OSU-2S mediated effects on these ubiquitous phosphatases in unintended cells and avoid potential adverse effects we developed a OSU-2S targeted delivery immunonanoparticles (2A2-OSU-2S-ILP), that mediated selective cytotoxicity of CLL but not normal B cells through targeting receptor tyrosine kinase ROR1 expressed in leukemic but not normal B cells. Developing a novel spontaneous CLL mouse model expressing human ROR1 (hROR1) in all leukemic B cells, we demonstrate the therapeutic benefit of enhanced survival with 2A2-OSU-2S-ILP in-vivo. The newly developed non-immunosuppressive OSU-2S, its delivery using human CLL directed immunonanoparticles and the novel transgenic mouse model of CLL that expresses hROR1 exclusively in leukemic B cell surface are highly innovative and can be applied to CLL and other ROR1+ malignancies including mantle cell lymphoma and acute lymphoblastic leukemia.Leukemia accepted article preview online, 20 June 2014; doi:10.1038/leu.2014.199.