This investigation reports the nanostructural evolution and associated encapsulation and elution of a hydrophobic drug, demethoxycurcumin (DMC), as a molecular probe, with the carboxymethyl-hexanoyl chitosan (CHC), which has been a technically interesting amphiphilic chitosan-based polymer successfully developed in this lab for years. The self-assembly nature of the CHC in neutral aqueous solutions allowed efficient encapsulation of various drugs without deteriorating or changing drugs’ activity. However, its self-assembly behavior associated with nanostructural stability or variation, in terms of residence time in aqueous solution has not been well characterized and how the CHC nanostructure may be altered upon entrapping a drug, followed releasing out of the nanostructure. In this study, the CHC/DMC assembled model was used to evaluate entrapping efficiency, CHC-DMC interaction, and nanostructural variation while the drug being encapsulated and released from the CHC nanoparticles. Experimental outcomes showed a fractal transition between nanoparticulate and short fiber-like network evolution of the CHC as time elapsed, with the presence or absence of the DMC probe. This entrapment of DMC is relatively efficient upon CHC assembly and the associated DMC arrangement inside the helical CHC macromolecule gave largely increasing space over the resulting CHC/DMC assembly. Its excellent colloidal and nanostructural stability over a reasonably long period of time in testing environment suggests that this CHC/DMC assembly not only provides a crucial advantage for drug delivery application but also considers as a nanostructural model for better understanding of the mechanism upon drug encapsulation and elution which may be applicable to alternative amphiphilic polysaccharide-based macromolecules.