Pegylation technology has been widely used to improve therapeutic efficacies of protein drugs and a number of selective- or randomly-substituted pegylated proteins are on the market. In this study, we prepared a insulin derivative substituted randomly with poly(ethylene glycol) (PEG, MW about 2200) and its polypseudorotaxanes with cyclodextrins (CyDs). The pegylated insulin formed polypseudorotaxanes with alpha- and gamma-CyDs, by inserting one PEG chain in the alpha-CyD cavity and two PEG chains in the gamma-CyD cavity. The pegylated insulin/CyD polypseudorotaxanes were less soluble in water. The release rate of the pegylated protein from its polypseudorotaxanes decreased in the order of drug alone>the gamma-CyD polypseudorotaxane>the alpha-CyD polypseudorotaxane. The pegylated insulin/gamma-CyD polypseudorotaxane displayed a significantly higher resistance to proteolysis. The results indicated that the CyD polypseudorotaxanes could be formed with randomly-pegylated insulin and work not only as a sustained release system, but also as a stabilizing agent to enzymatic degradations of pegylated insulin.