Functional imaging techniques provide the ability to detect tumors even before structural modifications occur. Positron Emission Tomography (PET) in combination with glucose analogue 18F-2-fluoro-2-deoxy-d-glucose (FDG) is currently the most important functional imaging technique for visualization of tumors by taking advantage of the increased glucose metabolic activity of cancer cells. However, a major shortcoming of this technology is the non-specificity for tumor tissues as other biological events, such as infection or inflammation, which are usually induced by cancer therapy techniques, also result in increased glucose metabolic activity. Since PET scan combined with FDG measures the uptake of glucose, it is unable to discriminate between cancer recurrence and post treatment inflammation. In this research we developed a highly specific, biodegradable nanoparticle for differentiation between cancer and inflammation using conventional PET-CT technique. The lipid- based nanoparticles- liposomes, are functionalized with both glucose to increase cellular uptake and a radioactive tracer to enable nanoparticle detection. The liposomes sensitively discriminate between tumors and inflammation due to the unique bio-distribution and pharmacokinetic profile of nanoparticles, along with the unique characteristics of tumor vasculature which allow the accumulation and retention of nanoparticles in a defined size range to a greater extent than in inflammatory lesions.