Current study is focused to enhance the solubility of poorly soluble drug olanzapine (OLZ) by nanogels drug delivery system, as improved solubility is one of the most important applications of nanosystems. Poor solubility is a major issue, and 40% of marketed and about 75% of new active pharmaceutical ingredients are poorly water soluble which significantly affect the bioavailability and therapeutic effects of these drugs. In this study, nanogels, a promising system for solubility enhancement, were developed by freeradical polymerization technique. Different formulations were synthesized in which poloxamer-407 was cross-linked with 2-acrylamido-2-methylpropane sulfonic acid (AMPS) with the help of cross-linker methylene bisacrylamide (MBA). The chemically cross-linked nanogels were characterized by Fourier transform infrared spectroscopy (FT-IR), thermos gravimetric analysis (TGA), differential scanning calorimetry (DSC), X-ray diffraction (XRD), scanning electron microscopy (SEM), zeta size, swelling, sol-gel analysis, drug loading, solubility, and in vitro drug release studies. In order to determine the biocompatibility and cytotoxicity of nanogels to biological system, toxicity study on rabbits was also carried out. It was confirmed that the developed nanogels was thermally stable, safe, effective, and compatible to biological system, and the solubility of olanzapine (OLZ) was enhanced up to 38 folds as compared with reference product.