Biodegradable hollow capsules encapsulating protein drugs were prepared via layer-by-layer assembly of water-soluble chitosan and dextran sulfate on protein-entrapping amino-functionalized silica particles and the subsequent removal of the silica. In order to enhance the encapsulated efficiency and decrease its burst release, we designed this new system to fulfill these two goals. Bovine serum albumin (BSA), which was used as model protein, was entrapped in the nanocapsules. This system demonstrated a good capacity for the encapsulation and loading of BSA. The burst release was decreased to less than 10% in phosphate-buffered saline within 2h. No significant conformation change was noted from the released BSA in comparison with native BSA by using circular dichroism spectroscopy. Cell viability study suggested that the nanocapsules had good biocompatibility. The drug release kinetics mechanism is Fickian diffusion. These kinds of novel composite nanocapsules may offer a promising delivery system for water-soluble proteins and peptides.