Background: Up-regulation of hsp90 gene expression occurs in numerous cancers such as lung cancer. D,L-lactic-co-glycolic acid-poly ethylene glycol-17-dimethylaminoethylamino-17-demethoxy geldanamycin (PLGA-PEG-17DMAG) complexes and free 17-DMAG may inhibit the expression. The purpose of this study was to examine whether nanocapsulating 17DMAG improves the anti cancer effect over free 17DMAG in the A549 lung cancer cell line. Materials and Methods: Cells were grown in RPMI 1640 supplemented with 10% FBS. Capsulation of 17DMAG is conducted through double emulsion, then the amount of loaded drug was calculated. Other properties of this copolymer were characterized by Fourier transform infrared spectroscopy and H nuclear magnetic resonance spectroscopy. Assessment of drug cytotoxicity on the grown of lung cancer cell line was carried out through MTT assay. After treatment, RNA was extracted and cDNA was synthesized. In order to assess the amount of hsp90 gene expression, real-time PCR was performed. Results: In regard to the amount of the drug load, IC50 was significant decreased in nanocapsulated(NC) 17DMAG in comparison with free 17DMAG. This was confirmed through decrease of HSP90 gene expression by real-time PCR. Conclusions: The results demonstrated that PLGA-PEG-17DMAG complexes can be more effective than free 17DMAG in down-regulating of hsp90 expression by enhancing uptake by cells. Therefore, PLGA-PEG could be a superior carrier for this kind of hydrophobic agent.