In this paper, we report the synthesis and characterization of a novel cross-linked N-isopropylacrylamide-acrylic acid-hydroxyethyl methacrylate [P (NIPASM-AA-HEM)] hydrogel nanoparticles (NPs) containing amoxicillin. The aim of present study was to investigate whether these hydrogel NPs have the potential to be used in antibiotic delivery to stomach for treatment of Helicobacter pylori. Amoxicillin-loaded hydrogel NPs were prepared using cross-linked P (NIPASM-AA-HEM) as mucoadhesive polymer for the potential use of treating gastric and duodenal ulcers. Aiming at predicting the in vivo behavior of the amoxicillin-loaded NPs, the physicochemical properties in terms of entrapment efficiency (EE%), mean diameter, and morphology of NPs was evaluated. The dependence of the EE% of the drug on the organic to aqueous phase ratio was also studied. The profile of amoxicillin release from P (NIPASM-AA-HEM) NPs system was studied under various conditions. In all these experiments, amoxicillin release in the free form was studied by ultraviolet (UV) spectrophotometric analysis. Experimental results showed that at pH 7.4, drug release rises when polymer concentration in the formulation increases; in human plasma on the contrary, drug release is reduced as concentration of the polymer in the formulation rises. In vitro amoxicillin release rate was also higher in pH 1 than that in pH 7.4. About 88.5% of amoxicillin entrapped in the NPs was released in 4 h in the pH 1.0 medium, whereas in phosphate buffer at pH 7.4 no more than 45% was released after 4 h incubation at 37 °C. Amoxicillin concentration in rat's gastric tissue was determined. The results of in vivo studies showed that the hydrogel NPs enhance drug concentration at topical site than powder amoxicillin. Thus, amoxicillin-loaded hydrogel NPs may provide therapeutic concentration at a much lower dose that may reduce the adverse effects of amoxicillin in high doses.