Significant advances in the understanding of the genetic abnormalities that lead to the development, progression, and metastasis of neoplastic diseases has raised the promise of gene therapy as an approach to medical intervention. Most of the clinical protocols that have been approved in the United States for gene therapy have used the viral vectors because of the high efficiency of gene transfer. Conventional means of gene delivery using viral vectors, however, has undesirable side effects such as insertion of mutational viral gene into the host genome and development of replication competent viruses. Among non-viral gene delivery methods, polymeric nanoparticles are increasingly becoming popular as vectors of choice. The major limitation of these nanoparticles is poor transfection efficiency at the target site after systemic administration due to uptake by the cells of reticuloendothelial system (RES). In order to reduce the uptake by the cells of the RES and improve blood circulation time, these nanoparticles are coated with hydrophilic polymers such as poly(ethylene glycol) (PEG). This article reviews the use of such hydrophilic polymers employed for improving the circulation time of the nanocarriers. The mechanism of polymer coating and factors affecting the circulation time of these nanocarriers will be discussed. In addition to the long circulating property, modifications to improve the target specificity of the particles and the limitations of steric protection will be analyzed.