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The purpose of this study was to develop a single-dose insulin delivery system based on poly (lactide-co-glycolide) (PLGA) microspheres to provide basal insulin level for a prolonged period. Insulin-loaded PLGA microspheres were prepared by water-in-oil-in-water double emulsion (batch A) and solid-in0oil-in-water emulsion (batch B) methods. Microspheres were characterized for physical characteristics and in vitro release. In vivo absorption of insulin and biocompatibility of insulin-loaded PLGA microspheres were performed in diabetic New Zealand white rabbits. Light and transmission electron microscopy were performed on the skin tissues excised from microspheres injected sites in order to study the biocompatibility. The burst release of insulin was high (47%) from batch B and low (5%) from batch A. Therefore, we mixed microspheres of batch A and B in ratio of 3 w/w, which produced desirable in vitro release profile. In vivo absorption study showed that insulin-loaded microspheres provided a serum insulin level of 20–40 μU/ml up to 40 days. Biocompatibility study provided evidence of normal inflammatory and foreign body reactions, which were characterized by the presence of macrophages, fibroblasts and foreign body giant cells. Neither necrosis nor tissue damage was identified. At the end of 12 weeks, no distinct histological differences were observed in comparison to the control tissue samples. In conclusion, insulin-loaded PLGA microspheres controlled the in vivo absorption of insulin to maintain the basal insulin level for longer period and the delivery system was biocompatible.