We have developed hydrogel nanoparticles made of poly-γ-glutamic acid (PGA) and chitosan, which entraps both glucose oxidase (GOx) and magnetic nanoparticles (MNPs) within the hydrogel matrix. The preparation of poly-γ-glutamic acid/chitosan hydrogel nanoparticles (PGA/CS NPs) entrapping GOx and MNPs begins with the mixing of GOx and MNPs with PGA solution followed by their dropwise addition into chitosan solution to induce rapid ionic gelation. The glucose sensing relies on the generation of H2O2 through the entrapped GOx-mediated catalysis in the presence of glucose, which consequently activates the peroxidase-like activity of MNPs to convert an employed chromogenic substrate, 2,2'-azino-bis(3-ethylbenzothiazoline-6-sulphonic acid) diammonium salt (ABTS), into a green colored product. Using this strategy, the target glucose was successfully detected over a wide linear range, from 5 to 100 μM with a lower detection limit of 3 μM, which is sufficient to diagnose high level of glucose (hyperglycemia) in human blood. The hydrogel nanoparticle-based glucose biosensor also showed high stability with magnetic reusability. Since any oxidative enzymes could be incorporated within the PGA/CS NPs, we expect that the hydrogelbased biosensor would be highly beneficial for the detection of various other clinically important target molecules.