Strategies to design effective and safe colloidal carriers for biopharmaceuticals have evolved through applying the knowledge gained in nanotechnology to medicine. Designing a colloidal carrier to serve as a protein delivery device requires an understanding of the effect of different materials on the physicochemical, physiological and toxicological parameters for clinical application. The purpose of this study was to evaluate the influence of formulation components on the physicochemical factors and biological function involved in the development and optimization of newly designed nanoparticles for orally dosed insulin. Biodegradable, biocompatible, mucoadhesive and protease-protective biomaterials were combined through ionotropic pre-gelation and polyelectrolyte complexation forming an alginate, dextran sulfate and poloxamer hydrogel containing insulin, stabilized in nanoparticles with chitosan and poly(ethyleneglycol) and coated with albumin. Nanoparticles ranged in size from 200 to 500nm with 70-90% insulin entrapment efficiency, and electrostatic stabilization was suggested by zeta potential values lower than -30mV. This combination of formulation components was selected for insulin protection against harsh gastric pH and proteolytic conditions, and to improve insulin absorption through intestinal mucosa by combining nanoparticle uptake and insulin release at the site of absorption. Insulin was shown to be bioactive after nanoparticle formulation and release in neutral pH conditions. Fourier transform infrared spectroscopy was used to confirm the presence of formulations components in the nanoparticle structure and to identify potential interactions between biomaterials.