The goal of this study was to develop a microparticulate delivery system based on a thiolated chitosan conjugate for the nasal application of peptides. Insulin was used as model peptide. For thiolation of chitosan 2-iminothiolane was covalently linked to chitosan. The resulting chitosan-TBA (chitosan-4-thiobutylamidine) conjugate featured 304.89+/-63.45 micromol thiol groups per gram polymer. 6.5% of these thiol groups were oxidised. A mixture of the chitosan-TBA conjugate, insulin and the permeation mediator reduced glutathione were formulated to microparticles. Control microparticles comprised unmodified chitosan and insulin. As second control served mannitol-insulin microparticles. All microparticulate systems were prepared via the emulsification solvent evaporation technique. In 100 mM phosphate buffer pH 6.8 chitosan-TBA-insulin microparticles swelled 4.39+/-0.52-fold in size, whereas chitosan based microparticles did not swell at all. Chitosan-TBA microparticles showed a controlled release of fluorescein isothiocyanate (FITC)-labelled insulin over 6 h. Nasal administered chitosan-TBA-insulin microparticles led to an absolute bioavailability of 7.24+/-0.76% (means+/-S.D.; n=3) in conscious rats. In contrast, chitosan-insulin microparticles and mannitol-insulin microparticles exhibited an absolute bioavailability of 2.04+/-1.33% and 1.04+/-0.27%, respectively (means+/-S.D.; n=4). Because of these results microparticles comprising chitosan-TBA and reduced glutathione seem to represent a useful formulation for the nasal administration of peptides.