Endogenous survivin expression has been related with cancer survival, drug resistance, and metastasis. Therapies targeting survivin have been shown to significantly inhibit tumor growth and recurrence. We found out that a cell-permeable dominant negative survivin (SurR9-C84A, referred to as SR9) competitively inhibited endogenous survivin and blocked the cell cycle at the G1/S phase. Nanoencapsulation in mucoadhesive chitosan nanoparticles (CHNP) substantially increased the bioavailability and serum stability of SR9. The mechanism of nanoparticle uptake was studied extensively in vitro and in ex vivo models. Our results confirmed that CHNP-SR9 protected primary cells from autophagy and successfully induced tumor-specific apoptosis via both extrinsic and intrinsic apoptotic pathways. CHNP-SR9 significantly reduced the tumor spheroid size (three-dimensional model) by nearly 7-fold. Effects of SR9 and CHNP-SR9 were studied on 35 key molecules involved in the apoptotic pathway. Highly significant (4.26-fold, P≤0.005) reduction in tumor volume was observed using an in vivo mouse xenograft colon cancer model. It was also observed that net apoptotic (6.25-fold, P≤0.005) and necrotic indexes (3.5-fold, P≤0.05) were comparatively higher in CHNP-SR9 when compared to void CHNP and CHNP-SR9 internalized more in cancer stem cells (4.5-fold, P≤0.005). We concluded that nanoformulation of SR9 did not reduce its therapeutic potential; however, nanoformulation provided SR9 with enhanced stability and better bioavailability. Our study presents a highly tumor-specific protein-based cancer therapy that has several advantages over the normally used chemotherapeutics.