Abstract: Hypotonic formulations and methods for delivering drugs to bladder, improving drug absorption and retention therein, and minimizing systemic toxicity, are provided. The formulation includes particles formed from the assembly or association between biocompatible polymers with and without low or high grafting density of polyethylene glycol (PEG) and a wide range of drugs. A hypotonic medium or water allows the particles to penetrate and distribute within bladder tissue, where the particles are capable of dissolution to release drugs for absorption and retention. A reduced level of local and systemic toxicity and side effects of the formulation, compared to delivery of drugs in their free form, provides an effective and safe drug delivery platform for treating bladder or associated diseases or disorders.