The objective of the present study was to evaluate the effects of formulation parameters on the in vivo pharmacological activity of the chitosan-insulin nanoparticles. Chitosan-insulin nanoparticles were prepared by ionotropic gelation at pH 5.3 and 6.1 and denoted as F5.3 np and F6.1 np, respectively. F5.3 np and F6.1 np administered orally at insulin doses of 50 U/kg and/or 100 U/kg were effective at lowering the serum glucose level of streptozotocin-induced diabetic rats. The 100 U/kg-dose F5.3 np sustained the serum glucose at pre-diabetic levels for at least 11 h. In comparison, F6.1 np had a faster onset of action (2h versus 10h) but lower efficiency. The effectiveness of peroral F5.3 np and F6.1 np in lowering the serum glucose level of streptozotocin-induced diabetic rats was ascribed to the local effect of insulin in intestine. Confocal micrographs showed strong interaction between rat intestinal epithelium and chitosan nanoparticles 3h post-oral administration.