PEG–lipid micelles, primarily conjugates of polyethylene glycol (PEG) and distearyl phosphatidylethanolamine (DSPE) or PEG–DSPE, have emerged as promising drug-delivery carriers to address the shortcomings associated with new molecular entities with suboptimal biopharmaceutical attributes. The flexibility in PEG–DSPE design coupled with the simplicity of physical drug entrapment have distinguished PEG–lipid micelles as versatile and effective drug carriers for cancer therapy. They were shown to overcome several limitations of poorly soluble drugs such as non-specific biodistribution and targeting, lack of water solubility and poor oral bioavailability. Therefore, considerable efforts have been made to exploit the full potential of these delivery systems; to entrap poorly soluble drugs and target pathological sites both passively through the enhanced permeability and retention (EPR) effect and actively by linking the terminal PEG groups with targeting ligands, which were shown to increase delivery efficiency and tissue specificity. This article reviews the current state of PEG–lipid micelles as delivery carriers for poorly soluble drugs, their biological implications and recent developments in exploring their active targeting potential. In addition, this review sheds light on the physical properties of PEG–lipid micelles and their relevance to the inherent advantages and applications of PEG–lipid micelles for drug delivery.