One of the greatest challenges in cancer therapy is to develop methods to deliver chemotherapy agents to tumor cells while reducing systemic toxicity to noncancerous cells. A promising approach to localizing drug release is to employ drug-loaded nanoparticles with coatings that release the drugs only in the presence of specific triggers found in the target cells such as pH, enzymes, or light. However, many parameters affect the nanoparticle distribution and drug release rate, and it is difficult to quantify drug release in situ. In this work, we show proof-of-principle for a "smart" radioluminescent nanocapsule with an X-ray excited optical luminescence (XEOL) spectrum that changes during release of the optically absorbing chemotherapy drug, doxorubicin. XEOL provides an almost background-free luminescent signal for measuring drug release from particles irradiated by a narrow X-ray beam. We study in vitro pH-triggered release rates of doxorubicin from nanocapsules coated with a pH-responsive polyelectrolyte multilayer using HPLC and XEOL spectroscopy. The doxorubicin was loaded to over 5% by weight and released from the capsule with a time constant in vitro of ∼36 days at pH 7.4 and 21 h at pH 5.0, respectively. The Gd2O2S:Eu nanocapsules are also paramagnetic at room temperature with similar magnetic susceptibility and similarly good MRI T2 relaxivities to Gd2O3, but the sulfur increases the radioluminescence intensity and shifts the spectrum. Empty nanocapsules did not affect cell viability up to concentrations of at least 250 μg/mL. These empty nanocapsules accumulated in a mouse liver and spleen following tail vein injection and could be observed in vivo using XEOL. The particles are synthesized with a versatile template synthesis technique which allows for control of particle size and shape. The XEOL analysis technique opens the door to noninvasive quantification of drug release as a function of nanoparticle size, shape, surface chemistry, and tissue type.