New intravesical treatment approaches for bladder cancer are needed as currently approved treatments show several side effects and high tumor recurrence rate. Our study used MB49 murine urothelial carcinoma model to evaluate oxygen encapsulated cellulosic nanobubbles as a novel agent for imaging and ultrasound guided drug delivery. In this study, we show that oxygen nanobubbles (ONB) can be propelled (up to 40 mm/s) and precisely guided in vivo to the tumor by an ultrasound beam. Nanobubble velocity can be controlled by altering the power of the ultrasound Doppler beam, while nanobubble direction can be adjusted to different desired angles by altering the angle of the beam. Precise ultrasound beam steering of oxygen nanobubbles was shown to enhance the efficacy of mitomycin-C, resulting in significantly lower tumor progression rates while using a 50% lower concentration of chemotherapeutic drug. Further, dark field imaging was utilized to visualize and quantify the ONB ex vivo. ONBs were found to localize up to 500 µm inside the tumor using beam steering. These results demonstrate the potential of an oxygen nanobubble drug encapsulated system to become a promising strategy for targeted drug delivery because of its multimodal (imaging and oxygen delivery) and multifunctional (targeting and hypoxia programming) properties.