Microscopy plays a crucial role in understanding the materials at nanoscale and evaluating inter & intra cellular processes at the nano/micro scale and beyond. Many hydrophobic drugs and agents encapsulated within nanosystems are reported for their enhanced therapeutic efficiency. In this paper, we discuss the differences in the drug dynamics and cellular uptake of two hydrophobic fluorescent compounds: Chlorophyll rich fraction of Anthocephalous cadamba (CfAc) & curcumin encapsulated within a liposomal nanosystem. The dynamics of hydrophobic drug release and its cellular interaction in vitro were studied by transmission electron microscopy (TEM) and confocal laser scanning microscopy (CLSM), respectively. Though CfAc and curcumin are both hydrophobic, they differ in their drug release dynamics. In the case of CfAc, the drug is released in its nano form directly into the cells. Whereas in the case of curcumin, the drug initially releases in the form of nano crystals which coalesce to form micron-sized crystalline depots. These depots then tend to release the drug in the localized cellular environment. The drug release patterns of both CfAc & curcumin were evidenced by using both TEM & CLSM. Graphical Abstract: The differences in drug dynamics and cellular uptake of two fluorescent hydrophobic anti-cancer agents: CfAc & curcumin [7–9, 16] © 2021, The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd.