Pyridyl disulfide-functionalized cyclic carbonate (PDSC) monomer was obtained in four straightforward steps from 3-methyl-3-oxetanemethanol and exploited for facile preparation of functional poly(ε-caprolactone) (PCL) containing pendant pyridyl disulfide (PDS) groups via ring-opening copolymerization with ε-caprolactone. The results showed that PDS-functionalized PCL polymers were prepared with controlled molecular weights and functionalities. The exchange reaction between PDS-functionalized PCL and thiolated poly(ethylene glycol) (PEG-SH) at a PEG-SH/PDS molar ratio of 2/1 afforded PCL-g-SS-PEG graft copolymers in high yields. The dynamic light scattering (DLS) analyses showed that PCL-g-SS-PEG copolymer self-assembled into micelles with a diameter of 110–120 nm and a low polydispersity (PDI) in phosphate buffer (pH 7.4, 10 mM). PCL-g-SS-PEG micelles while sufficiently stable under physiological conditions were prone to rapid shell shedding and aggregation under a reductive condition. Doxorubicin (DOX) was loaded into PCL-g-SS-PEG micelles with a decent drug loading content of 10.1 wt %. Notably, in vitro release studies revealed that ca. 82.1% DOX was released in 12 h under a reductive environment analogous to that of the intracellular compartments such as cytosol and the cell nucleus whereas only ca. 17.5% DOX was released in 24 h under nonreductive conditions. Confocal microscopy observation indicated that DOX was delivered into the nuclei of HeLa cells following 8 h incubation with DOX-loaded PCL-g-SS-PEG micelles. MTT assays in HeLa cells demonstrated that DOX-loaded PCL-g-SS-PEG micelles retained high antitumor activity with low IC₅₀ (half-maximal inhibitory concentration) of 0.82–0.95 μg DOX equiv/mL while blank PCL-g-SS-PEG micelles were nontoxic up to a tested concentration of 1.0 mg/mL. This study presents a versatile and controlled synthesis of PDS-functionalized biodegradable polymers and reduction-sensitive biodegradable graft copolymer micelles that are of particular interest for active intracellular drug release.