The embodiments herein provide a nanoparticle system for targeted gene delivery or a drug delivery and a method of synthesizing the same. The nanoparticle composition for targeted gene transfer and drug delivery comprises a protein, a chitosan and a lipid. A method of synthesizing the nanoparticles involves preparing a gelatine and chitosan gel. A milky colloid solution is prepared with the gelatine, chitosan solution and a phosphatidylcholine. The milky colloid is homogenized for the self assembly of the nanoparticles. The milky colloid is subjected to high speed and high pressure homogenizer. The CHO cells are transfected with nanoparticles and lipofectamine 2000 for comparing the transfection efficiency. The nanoparticles deliver DNA, RNA, ribozyme and nucleotide sequences. The nanoparticles deliver lipophylic and hydrophilic drugs. The transfection efficiency of gene and drug is higher when the target cells are transferred with nanoparticles, compared to the cells transferred with lipofectamine 2000.
