The oral administration of insulin in poly(vinyl alcohol)-gel spheres (PVA-GS), an oral dosage form with prolonged residence time in the ileum, was examined in streptozotocin-induced diabetic rats. Intragastric administration of PVA-GS containing insulin and a protease inhibitor, aprotinin or bacitracin, caused a significant and prolonged reduction of blood glucose levels, suggesting insulin absorption. The bioavailability of insulin estimated from the hypoglycemic effect was about 2% in the presence of either protease inhibitor. The release profiles of insulin and the protease inhibitors from the PVA-GS could be explained by Higuchi's plot, and the rates were similar to each other. The site dependency of insulin absorption in the intestinal tract was examined by an in situ loop method. Insulin absorption estimated by plasma insulin levels was larger in the ileum and the large intestine than in the jejunum. The prolonged residence time of PVA-GS in the absorption site, the lower intestine, and the synchronous release of insulin and the protease inhibitors from the PVA-GS are the two major explanations for the improved bioavailability of insulin administered as PVA-GS containing a protease inhibitor.