5-Fluorouracil (5-FU) is the third most used chemotherapeutic agent. Despite being a frontline drug, it inhibits thymidylate synthase in malignant and non-malignant cells, which adds to its severe systemic toxicity. To address this, a new physiologically benign theranostic prodrug of 5-FU, named PD, has been developed by covalently linking 5-FU with a fluorophore and a lysosome-targeting morpholine moiety through an ester functionality. Esterase (Est), being overexpressed in various cancer cells such as human glioblastoma (U87) cells, human ovarian cancer (SKOV-3), induces cleavage of the ester linkage and results in a sustained release of 5-Fluorouracil-1-acetic acid (FUA), a precursor that liberates 5-FU in human physiology and subsequently 5-FU in the lysosome. A sustained and site-specific release of PD is attributed to a higher efficacy of PD in killing U87 (IC50: ~20 µM for 48 h incubation), and SKOV-3 (with lower Est expression, IC50: ~36 µM for 48 h incubation) cancer cell lines, which are much lower than the IC50 (≥ 50 µM) value for 5-FU in U87 cell line. Importantly, the cell viability for PD, when used in a much higher concentration (50 µM) in normal Chinese Hamster Ovary (CHO) cells, is evaluated as ~ 95%, which approves its probable efficacy in reducing systemic toxicity. The design of PD also enables us to achieve a ‘TURN-ON’ fluorescence response on Est-mediated cleavage of the ester functionality and demonstrates its potential for theranostic applications. Flow cytometry studies reveal death for live U87 cancer cells in both early and late apoptotic regions. CAM assay also confirmed the superiority of PD in limiting the development of the blood vasculature of the embryonic membrane to signify their antiangiogenic behaviour. Therapeutic efficacy of the PD is also demonstrated in a spheroid model, developed using human cervical cancer (HeLa) cell multicellular tumour sphere culture.