The coupling of drugs to macromolecular carriers received an important impetus from Ringsdorf's notion of polymer-drug conjugates. Several water-soluble polymers, poly(ethylene glycol), poly[N-(2-hydroxypropyl) methacrylamide], poly(l-glutamic acid) and dextran, are studied intensively and have been utilized successfully in clinical research. The promising results arising from clinical trials with polymer-drug conjugates (e.g., paclitaxel, doxorubicin, camptothecins) have provided a firm foundation for other synthetic polymers, especially biodegradable polymers, used as drug delivery vehicles. This review discusses biodegradable polymeric micelles as an alternative drug-conjugate system. Particular focus is on A-B or B-A-B type biodegradable amphiphilic block copolymer such as polylactide, morpholine-2,5-dione derivatives and cyclic carbonates, which can form a core-shell micellar structure, with the hydrophobic drug-binding segment forming the hydrophobic core and the hydrophilic segment as a hydrated outer shell. Polymeric micelles can be designed to avoid uptake by cells of reticuloendothelial system and thus enhance their blood lifetime via the enhanced permeability and retention effect. Active tumor-targeting may be achieved by modifying the micelle surface with specific ligands. The potential application areas are discussed and future challenges are highlighted.