The development of oral insulin using the eligen technology represents a significant advance in insulin administration which is expected to improve the quality of life of diabetic patients. As clinical studies progress, a great deal of interest has focused on the process by which this technology enables insulin absorption from the intestinal lumen into the bloodstream. The eligen technology employs low molecular weight compounds (termed drug delivery agents or carriers) which interact weakly and non-covalently with insulin, increasing its lipophilicity and thereby its ability to cross the gastrointestinal epithelium. In this study we investigated the mechanism of insulin absorption across caco-2 cell monolayers with one of these drug delivery agents, N-[8-(2-hydroxybenzoyl)amino] caprylate (SNAC). Our results show that SNAC increases insulin permeability approximately ten fold across cell monolayers and does so without affecting mannitol permeability or disrupting cell membranes. Confocal microscopy and immunocytochemistry revealed that insulin is transported transcellularly without detectable alteration of the tight junctions between adjacent cells. SNAC also appears to play some role in protecting insulin from proteolytic degradation, potentially allowing for more intact insulin to be available at the site of absorption.