Encapsulation of a model anti-cancer drug, 5-Fluorouracul (5-FU) into biocompatible core-shell nanofibers of polycaprolactone (PCL) nanofibers was fabricated using a coaxial electrospinning process. Our work aims to solve these issues using a novel method of fabrication of fibers featuring confinement of drugs within a biodegradable core-shell structure, thereby permitting sustained release of drugs to specific sites of treatment, such as tissues affected with tumor cells. The coaxial electrospinning was performed using a sheath polymer solution consisting of a 14 wt% PCL solution and a 5 wt% solution of 5-FU as the core solution. Dimethylformamide (DMF) was used as the solvent for both the sheath and core solutions. A high voltage electric field of 21 kV was used to draw a compound solution jet from a specialized coaxial spinneret. Morphological analysis of the drug-loaded nanofibers were performed using scanning electron microscopy (SEM) and energy dispersive x-ray spectroscopy (EDS). SEM images of the samples showed the formation of beaded structures (3-4 µm) along the length of nanofibers (90-200 nm). The presence of these beaded structures indicate the entrainment of the drug particles in the core through the combined effect of core jet breakup under high electrical forces and relative viscous drag at the interface between the sheath and core fluids during electrospinning. EDS analysis of the surface of the nanofibers showed negligible presence of drug particles, which further indicates successful encapsulation of 5-FU within the core layer of the core-shell nanofibers. In-vitro drug release kinetics of the nanofibers was investigated using UV-Vis spectroscopy. Drug-loaded fibers were immersed in an isotonic (pH=7.4) Phosphate-buffered saline solution (PBS), and characteristic absorbance peaks of 5-FU at a wavelength of 265 nm were recorded periodically. The drug release tests showed an initial release of 40% of the drug from the fibers in 6 days, and a more sustained release pattern showing a total of 80% drug released over a period of 25 days. Encapsulation efficiency of the drug in the fibers was determined to be 71%. Further results are expected based on in-vitro cytotoxicity of nanofibers to cultured prostate and breast cancer cells when exposed to the drug-loaded fibers.