Paclitaxil is a non-water soluble anti-cancer drug with problems of solvent related toxicities due to use of ethanol and polyethylated castor-oil for administration. Several formulations have been prepared to overcome the solubility problem and the present work describes one of such possibility of the preparation of water-soluble paclitaxil nanoparticles by Emulsion-solvent evaporation technique. The paclitaxil nanoparticles were prepared by nanoemulsification using human serum albumin as polymer. The prepared nanoparticles were evaluated by stability studies, encapsulating efficiency, in-vitro toxicity studies. It aims to verify the in vivo capacity of the formed nanoparticles to reduce the toxicity, which would have been caused by the conventional Cremophor EL. The prepared nanoparticles were soluble in 0.9%NaCl, showed better encapsulating efficiency and the reconstituted solution was stable for more than 24 hrs. In-vivo abnormal toxicity studies were carried out on albino mice and guinea pig and showed that the paclitaxilnanoparticles formed had no toxicity as compared to Cremophor EL.