Poly(N‐isopropylacrylamide) (PNIPAM) is an important thermo‐responsive polymer that finds applications in many areas. However, the preparation of PNIPAM‐based block copolymer nanoparticles with higher‐order morphologies at high solids is challenging. Herein, aqueous photoinitiated polymerization‐induced self‐assembly (photo‐PISA) of N‐isopropylacrylamide (NIPAM) using an asymmetrical cross‐linker is developed for one‐step preparation of PNIPAM‐based block copolymer nanoparticles with various morphologies (spheres, worms, and vesicles). It is demonstrated that reaction temperature has a great effect on both polymerization kinetics and morphologies of block copolymer nanoparticles. Reversible addition‐fragmentation chain transfer (RAFT) reactive groups embedded inside the PNIPAM core provide a landscape for further functionalization. PNIPAM‐based block copolymer nanoparticles with different surface properties are prepared by seeded photo‐PISA at room temperature. Finally, these block copolymer nanoparticles are also used as additives to tune mechanical properties of hydrogels via covalent cross‐linking.