Introduction of a novel biocompatible, stable, biomaterial for drug delivery application remains always challenging. In the present study, we report the synthesis of an extremophilic bacterial sulfated polysaccharide based nanoparticle as a stable biocompatible material for drug delivery, evaluation of anticancer efficacy and bioimaging. Mauran (MR), the sulfated exopolysaccharide extracted from a moderately halophilic bacterium, Halomonas maura was used for the synthesis of nanoparticles along with chitosan (CH). MR/CH nanoparticles were synthesized by simple polyelectrolyte complexation of anionic MR and cationic CH. The MR/CH hybrid nanoparticles formed were ranging between 30 and 200 nm in diameter with an overall positive zeta potential of 27.5 ± 5 mV and was found to be stable under storage in solution for at least 8 weeks. In vitro drug release studies showed a sustained and prolonged delivery of 5-fluorouracil (5FU) for 10–12 days from MR/CH nanoparticles under three different pHs of 4.5, 6.9 and 7.4 respectively. Cytotoxicity assay revealed that MR/CH nanoparticles were non-cytotoxic towards normal cells and toxic to cancer cells. Also, 5FU loaded MR/CH nanoparticles were found more effective than free 5FU in its sustained and controlled manner of killing breast adenocarcinoma cells. Fluorescein isothiocyanate (FITC) labeled MR/CH nanoparticles were used for cell binding and uptake studies; thereby demonstrating the application of dye tagged MR/CH nanoparticles for safe and nontoxic mode of live cellular imaging. We report the introduction of an extremophilic bacterial polysaccharide, MR, for the first time as a novel biocompatible and stable biomaterial to the world of nanotechnology, pharmaceutics and biomedical technology.