Display omitted •A functionalized chemo/thermal therapy system (DI-NPs) has been developed.•Cellular uptake of DI-NPs by MDR cancer cells was significantly enhanced.•P-gp activity was inhibited by cholesterol-PEG adduct on cell membrane.•The MDR tumor growth was almost entirely inhibited by the combination therapy.•DI-NPs exhibited a prominent therapeutic effect against human MDR breast tumor. To overcome low therapeutic efficacy of chemotherapy against multidrug resistance (MDR) breast cancer, a combination therapy system based upon functionalized polymer nanoparticles comprising poly(γ-glutamic acid)-g-poly(lactic-co-glycolic acid) (γ-PGA-g-PLGA) as the major component was developed. The NPs were loaded with doxorubicin (DOX) and indocyanine green (ICG) for dual modality cancer treatment and coated with cholesterol-PEG (C-PEG) for MDR abrogation in treatment of human MDR breast cancer. The in vitro cellular uptake of the DOX/ICG loaded nanoparticles (DI-NPs) by MDR cancer cells was significantly enhanced owing to effective inhibition of the P-gp activity by C-PEG and γ-PGA receptor-mediated endocytosis. DOX localization in cytoplasm and nucleus was observed particularly with the photo-thermal effect that facilitated intracellular drug release. As a result, the C-PEG coated DI-NPs after photo-irradiation exhibited a synergistic effect of combination (chemo/thermal) therapy to depress the proliferation of MDR cancer calls. The ex vivo biodistribution study revealed an enhanced tumor accumulation of C-PEG (2000) coated DI-NPs in MCF-7/MDR tumor-bearing nude mice due to the excellent EPR effects by the NP surface PEGylation. The MDR tumor growth was almost entirely inhibited in the group receiving combination therapy from CP2k-DI-NPs and photo-irradiation along with substantial cell apoptosis of tumor tissues examined by immunohistochemical staining. The results demonstrate a promising dual modality therapy system, CP2k-DI-NPs, developed in this work for effective combination therapy of human MDR breast cancer.