The present work explores the possibility of formulating an oral insulin delivery system using nanoparticulate complexes made from the interaction between biodegradable, natural polymer called chitosan and anionic surfactant called sodium lauryl sulfate (SLS). The interaction between chitosan and SLS was confirmed by Fourier transform infrared spectroscopy. The nanoparticles were prepared by simple gelation method under aqueous-based conditions. The nanoparticles were stable in simulated gastric fluids and could protect the encapsulated insulin from the GIT enzymes. Additionally, the in vivo results clearly indicated that the insulin-loaded nanoparticles could effectively reduce the blood glucose level in a diabetic rat model. However, additional formulation modifications are required to improve insulin oral bioavailability.