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The purpose of this research was to investigate whether Eudragit S100 microspheres have the potential to serve as an oral carrier for peptide drugs like insulin. Microspheres were prepared using water-in oil-in water emulsion solvent evaporation technique with polysorbate 20 as a dispersing agent in the internal aqueous phase and polyvinyl alcohol (PVA)/polyvinyl pyrrolidone as a stabilizer in the external aqueous phase. The use of smaller internal aqueous-phase volume (50 μL) and external aqueous-phase volume (25 mL) containing PVA in the manufacturing process resulted in maximum encapsulation efficiency (81.8%±0.9%). PVA-stabilized microspheres having maximum drug encapsulation released 2.5% insulin at pH 1.0 in 2 hours. In phosphate buffer (pH 7.4), microspheres showed an initial burst release of 22% in 1 hour with an additional 28% release in the next 5 hours. The smaller the volumes of internal and external aqueous phase, the lower the initial burst release. The release of drug from microspheres followed Higuchi kinetics. Scanning electron microscopy of PVA-stabilized microspheres demonstrated spherical particles with smooth surface, and laser diffractometry revealed a mena particle size of 32.51±20 μm. Oral administration of PVA stabilized microspheres in normal albino rabbits (equivalent to 6.6 IU insulin/kg of animal weight) demonstrated a 24% reduction in blood glucose level, with maximum plasma glucose reduction of 76±3.0% in 2 hours and effect continuing up to 6 hours. The area under the percentage glucose reduction-time curve was 93.75%. Thus, our results indicate that Eudragit S100 microspheres on oral administration can protect insulin from proteolytic degradation in the gastrointestinal tract and produce hypoglycemic effect.