Inflammatory bowel disease (IBD) causes inflammation in any part of gastrointestinal (GI) tract and the main reason for the occurrence of this disease is not still known. The main obstacle with the drug therapy for IBD is the dependency of the treatment to the severity of the disease and drug targeting which make the drug therapy controversial. Cell-based systems have been proposed to improve the drug targeting and release while healing the damaged epithelium in IBD. Organoids have been proposed in this study as source of cells that can facilitate regeneration and entrap drugs. Organoids are bud-like structure that are formed from intestinal stem cells (ISCs) and can target the inflamed area while releasing the drug at the site of action and regenerating the inflamed tissue. The focus of this dissertation is the evaluation of the organoid ability to entrap the drug-loaded nanoparticles and the organoid’s ability to heal the inflammation.It was shown that organoids can entrap PLGA nanoparticles in a timely manner and pump out the nanoparticles after a certain time. Negatively charged 5-ASA loaded PLGA nanoparticles coated with alginate were made. It was shown that mixing nanoparticles with organoid suspension and Matrigel could enhance the nanoparticle entrapment. It was also confirmed that PLGA nanoparticles did not impose any harmful effect on the organoid’s viability and growth. Moreover, the effect of differently-charged particle surface on the entrapment have been evaluated using negatively charged alginate and positively charged chitosan coated PLGA nanoparticles. It was shown that organoids had more affinity to positively charged particles resulting in more particle entrapment. Neither alginate nor chitosan coating were harmful for the organoids in terms of growth and viability. Based on what has been observed in these studies, more attempt was directed towards in vivo evaluation of the delivery system and the systems application to treat inflammation. To apply this system rectally, distal colon was the target and thus, colonic organoids needed to be developed. Colonoids with different media were cultured and none of the media formulations supported promising growth. Thus, intestinal homogenate was added to the system to provide enough growth factors for Wnt signaling. Colonoids grown with homogenate could grow into a 3-dimensional structure and showed enough proliferation and differentiation. Colonoids could survive for more than 6 passages while staying functional. As the next step, In vivo experiments using colonoids were performed. Mice were treated with 3% dextran sodium sulfate (DSS) for 5 days and 1.5% DSS for 2 days and this treatment provided lesions of distal colon. colonoids transplantation to inflamed colon tissue was evaluated as the next experiment and to determine the effect of IL-10 (interleukin-10) on healing after inflammation, IL-10 positive and IL-10 negative colonoids were transplanted to inflamed tissue. Colonoid infused mice showed superior epithelial regeneration compared to DSS treated mice without colonoid infusion showed in colonoscopy images. Moreover, IL-10 positive colonoids significantly increased healing and it was a confirmation of the effect of IL-10 on healing. Despite the great findings, there are still many quantitative analyses need to be performed to confirm the qualitative results attained from colonoscopy.