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Poly(ethylene glycol)-conjugated polyethylenimine (PEG-PEI) is a widely studied cationic polymer used to develop non-viral vectors for siRNA therapy of genetic disorders including cancer. Cell lines stably expressing luciferase reporter protein typically evaluate the transfection efficacy of siRNA/PEG-PEI complexes, however recent findings revealed that PEG-PEI can reduce luciferase expression independent of siRNA. This study elucidates a cause of the false positive effect in luciferase assays by using polymer nanoassemblies (PNAs) made from PEG, PEI, poly-(L-lysine) (PLL), palmitate (PAL), and deoxycholate (DOC): PEG-PEI (2P), PEG-PEI-PAL (3P), PEG-PLL (2P'), PEG-PLL-PAL (3P'), and PEG-PEI-DOC (2PD). In vitro transfection and western blot assays of luciferase using a colorectal cancer cell line expressing luciferase (HT29/LUC) concluded that 2P and 2P' caused no luciferase expression reduction while hydrophobically modified PNAs induced a 35–50% reduction (3P' < 2PD < 3P). Although cell viability remained stagnant, 3P triggered cellular stress responses including increased membrane porosity and decreased ATP and cellular protein concentrations. Raman spectroscopy suggested that hydrophobic groups influence PNA conformation changes, which may have caused over-ubiquitination and degradation of luciferase in the cells. These results indicate that hydrophobically modified PEG-PEI induces cellular distress causing over-ubiquitination of the luciferase protein, producing false positive siRNA transfection in the luciferase assay.